Industry and Pass-through Costs Explained
Network charges reflect the cost of distributing electricity and maintaining the infrastructure, the 'poles and wires’ or transmission. Different networks have different network characteristics requiring expenditure on capital investment and maintenance.
The network costs usually make up to 50% of your energy bill. These costs are regulated by the Australian Energy Regulator so network businesses can operate effectively, conduct required capital works and generate a profit.
*Excludes Bass Strait Islands.
Environmental scheme charges comprise of State and Federal Government policies related to encouraging the uptake of renewable energy and energy efficiency. These costs vary between states.
Small-scale Renewable Energy Scheme (SRES) and Large-scale Renewable Energy Target (LRET)
Both of these renewable energy schemes are managed by the Clean Energy Regulator (http://www.cleanenergyregulator.gov.au/), in order to:
- encourage the additional generation of electricity from renewable sources;
- reduce emissions of greenhouse gases in the electricity sector; and
- to ensure that renewable energy sources are ecologically sustainable.
Together the LRET and SRES aim to ensure that at least 20% of Australia’s electricity comes from renewable energy sources by 2020. This is an environmental policy legislated by the government to support the growth of the renewable energy sector.
To comply with the LRET and SRES, retailers are required to purchase Large-scale Generation Certificates or ‘LGCs’ and Small-scale Technology Certificates or ‘STCs’ in proportion to the volume of electricity they sell to customers. This charge is currently a component of your rates and will be adjusted to reflect the yearly indicative target as released by the Office of the Renewable Energy Regulator. More information at the Clean Energy Regulator.
The VEET scheme is a Victorian Government initiative aimed at promoting energy efficiency. The scheme was established under the Victorian Energy Efficiency Target Act 2007. Initially it only focused on residential accounts however from 1 Jan 2012 the VEET scheme has also covered business customers. Learn more www.veet.vic.gov.au.
The Energy Savings Scheme (ESS) commenced on 1 July 2009 in NSW. The ESS is designed to increase opportunities to improve energy efficiency by placing obligations on retailers to undertake or pay for energy efficiency programs, and rewarding companies that undertake eligible projects that reduce electricity consumption or improve efficiency. For more information visit www.ess.nsw.gov.au.
Retailer Energy Efficiency Scheme (REES)
The Retailer Energy Efficiency Scheme (REES) commenced on 1 January 2009 as the residential energy efficiency scheme. On 1 January 2015, REES was expanded to cover the small business sector. Under the REES, most energy retailers in South Australia are required to provide incentives for South Australian households and businesses to help them reduce their energy use and save on their energy costs. To find out more about the REES visit www.escosa.sa.gov.au
Consumer Price Index - CPI
As outlined in your Terms & Conditions, Momentum Energy may revise your electricity rates in line with the Consumer Price Index (CPI) for those customers who are on an ongoing contract with a benefit period. This is a measure of inflation reported by the Australian Bureau of Statistics.
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