Your electricity bill uses language that was never designed to be understood. Terms like "demand charge," "power factor," and "TUOS" appear without explanation, affecting hundreds or thousands of dollars on your bill. Most business owners pay these charges every quarter without knowing what they mean or whether they can be reduced.
These six terms are the ones that matter most to your bottom line. Understanding them is the difference between being the business owner who accepts whatever the bill says and the one who knows exactly where every dollar goes. Each explanation below gives you enough to take action \u2014 with a link to the full guide if you want to go deeper.
Demand charges are based on the maximum rate at which your business used electricity at any single moment during the billing period. One 15-minute peak — like turning on all your equipment at once in the morning — sets the demand charge for the entire month. For many businesses, demand charges make up 30–50% of the total bill, yet most business owners have never heard of them. Understanding demand charges is the single most important thing you can do to take control of your electricity costs. Read the full guide →
Power factor measures how much of the electricity your business draws from the grid is actually doing useful work, on a scale from 0 to 1. Think of it like a glass of beer — the beer is useful power, the froth is wasted capacity. A power factor of 0.7 means 30% of what you're drawing is froth. If you're on a kVA demand tariff, poor power factor inflates your demand charges. The fix is a capacitor bank ($3,000–$5,000 installed) that pays for itself in 10–18 months. Read the full guide →
TUOS (Transmission Use of System) pays for the high-voltage network that carries electricity from power stations to regional substations — the highways. DUOS (Distribution Use of System) pays for the local poles, wires, and transformers that deliver electricity to your business — the local streets. Together, network charges typically make up 40–50% of your total electricity cost. You can't negotiate them directly — they're regulated by the Australian Energy Regulator. But the tariff structure they're calculated on can sometimes be reviewed, and reducing your demand can lower the demand component. Read the full guide →
A standing offer is the default, most expensive electricity plan — the one you end up on if you've never compared or actively chosen a plan. Think of it as paying rack rate at a hotel. A market offer is a plan you actively choose, with rates set competitively by the retailer. Market offers are almost always cheaper than standing offers. If you've been with the same retailer for years and never reviewed your plan, there's a good chance you're on a standing offer — and switching to a market offer could save you hundreds per year. Upload your bill to BillDecoder and we'll tell you which one you're on.
Your electricity discount doesn't last forever. The benefit period is the time window during which your discounted rates apply — usually 12 or 24 months. When it ends, your rates silently jump to the retailer's standard price, which can be 20–30% higher. Your retailer won't warn you or send a reminder — they're counting on you not noticing. The benefit period end date is on your bill, usually in the fine print. BillDecoder highlights it automatically. Set a calendar reminder for two weeks before it ends, and you'll never overpay because of an expired discount again.
The Default Market Offer (DMO) is a maximum electricity price set by the Australian Energy Regulator for NSW, South Australia, and South East Queensland. The Victorian Default Offer (VDO) serves the same purpose in Victoria. They act as a safety net so standing offer customers don't pay excessively high rates. Here's the catch: the DMO and VDO explicitly exclude customers on demand tariffs. Since most SMEs with significant electricity use are on demand tariffs, the government price cap doesn't protect them. This means your retailer can set demand rates at whatever the market will bear — making it even more important to understand what you're paying.
These six terms cover the charges and concepts that have the biggest impact on what you pay. For a complete reference, our business electricity glossary explains 40+ terms in plain English.
Want to see all of this on your own bill?
Upload your bill and BillDecoder will identify every charge, explain every term, and tell you where to save.
Analyse your business billWhere can I learn more about each of these terms?
We've written detailed guides on each topic. The demand charges guide, power factor guide, and TUOS/DUOS guide each go into full depth with examples and action steps. The full glossary covers 40+ terms in plain English.
Which of these terms is most important for my bottom line?
Demand charges, by far. If your business is on a demand tariff, understanding and managing demand charges is the single biggest lever you have. Power factor is second — it directly inflates demand charges if it's poor.
Can BillDecoder identify all of these on my bill?
Yes. Upload your bill and BillDecoder will identify your tariff type, demand charges, power factor data (if present), network charges, and whether you're on a standing offer or market offer. It takes 60 seconds.
Last updated: March 2026