Electricity & Gas Industry Overview
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Electricity Industry |
Electricity retailers buy electricity through the National Electricity Market (NEM) and sell it to consumers.
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Network service providers (transmission and distribution companies) transport (or "supply") the electricity (sold to retailers) from generators to consumers and charge consumers network charges for use of the network. In the electricity supply industry, each customer has a separate contractual relationship with a retailer and the distributor, ETSA Utilities. The distribution contract is a deemed contract established in accordance with section 36 of the Electricity Act. It sets out the standard terms and conditions (including Guaranteed Service Level obligations on ETSA Utilities) on which ETSA Utilities connects a customer's supply address to its electricity distribution network, maintains that connection and supplies electricity to the supply address. The retailer and the distributor have another contractual arrangement with each other, particularly to coordinate their separate dealings with the customer. For example, the retailer bills the customer but does so as the agent of the distributor (in respect of network charges). The structure outlined above is often described as being triangular in nature. The Electricity Act specifies that retailing means the sale of electricity, while distribution means the physical supply of electricity. The electricity retail market is subject to competition and electricity retailers can decide what prices to charge. However, the Essential Services Commission sets a standing contract price (and associated standing contract terms and conditions) for those electricity customers who wish to be supplied on the standing contract with AGL SA rather than accept a market offer. The current electricity standing contract prices are available on the AGL website. |
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Gas Industry |
Gas retailers sell and supply gas to "end use" consumers such as residential households and businesses.
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Unlike electricity retailers who buy electricity through the NEM, gas retailers operate in a "contract carriage market" where they must have contractual arrangements in place for purchase (with gas producers such as Santos), transmission (with Epic Energy or SEAGas) and distribution (with Envestra) of gas. The wholesale gas price and terms and conditions of supply are governed by these agreements. Unlike the electricity supply industry, each gas customer has a contract only with a retailer. There is no direct contractual relationship between the customer and the distributor, Envestra. The structure is often described as being linear in nature, and the Gas Act specifies that retailing means the sale and supply of gas. As is the case in the electricity retail market, the gas retail market is subject to competition and gas retailers can decide what prices to charge customers on market contracts. Standing contract prices for small gas customers who wish to be supplied on the standing contract with Origin Energy are set by the Essential Services Commission. The current electricity standing contract prices are available on the Origin Energy website. |
