How does the price increase to the capacity term impact my electricity bill?
Remember that the power charge is the price that you pay for the contracted electrical capacity for your installation. This does not depend upon consumption. It is a fixed cost.
Final amount of your electricity bill depends upon both the power contracted and consumption. For this reason, a rise in the power charge does not always indicate an increase in your electricity bill, since it also depends upon the energy charge price.
In this way, if the price of the power or fixed charge rises but the energy or variable charge drops:
- Homes or businesses with a low electricity consumption will see their electricity bill increase.
- Homes or businesses with a higher electricity consumption may see a reduction in the final price of their electricity bill.