Electricity bills can have several components including:
- Retail energy charges – these are the charges set by your electricity retailer.
- Network charges – these are pass through costs from your network or “distributor”, they are regulated and won’t change between retailers.
- Industry charges – include Australian Energy Market Operator fees and state and federal renewable incentive charges.Depending on your billing type, you will either see all of these charges itemised in an “unbundled” bill, or they will be “bundled” together to simplify things.
What are network tariffs?
A network tariff is used by network operators or “distributors” to charge you for the use of their infrastructure – specifically supply and maintenance of the “poles and wires” that deliver electricity to your property.
Rates can vary depending on your network operator, property location and the electricity requirements of your business.
Your network charges are passed on to you by your electricity retailer through your monthly electricity bill, whether bundled or unbundled
Who sets the network tariffs?
The Australian Energy Regulatory (AER) requires electricity distributors to submit pricing proposals annually. Since 2017, the AER has determined whether a distribution company’s proposed network tariffs can be applied for the next regulatory year. This means that network tariff rates can change, depending on what the AER approves based on very detailed information from the network providers year to year.
Each network tariff has a usage threshold and can have –
- different rates for time of use
- different time of use charging periods
- can be inclusive of demand charges with demand charging periods also differing between tariffs