Regulated charges

What are the regulated charges on your invoice?

Ensuring reliable supply

The National Electricity Rules govern the operation of the National Electricity Market (NEM).

Under the National Electricity Rules (NER), the Australian Energy Market Operator (AEMO) can take action if required, to maintain or restore the power system to a reliable operating state.

There are different mechanisms that allow AEMO to access emergency reserves at times when the market is not able to meet high levels of demand. Typically, these events happen in times of extreme heat over the summer months.


Reliability and Reserve Emergency Trader (RERT)

When an event occurs in New South Wales and Victoria, AEMO may request generators to increase supply as well as ask large commercial users to significantly reduce load or shut down. In return, AEMO financially compensates those users. It is that cost that is then passed back to retailers, like Origin, who then pass the cost to customers who had consumed electricity in that region, at that time.

Why are you charged RERT?

RERT is calculated based on purchased load by energy retailers, then passed through to consumers based on their MWh consumption. Charges are received by the retailers in line with AEMO’s calendar which operates in arrears.

How is the RERT charge calculated?

RERT has two components:

1. Capacity or fixed charge

This represents payment to contracted participants to ensure they are available should AEMO deem it necessary to stabilise the power system.

2. Activation or variable charge

This charge applies when the service is activated. All events are listed on the AEMO website: RERT Reporting.


Directions

When an event occurs in South Australia, AEMO can request generators to increase supply where possible, as well as requesting large commercial users to significantly reduce load or shut down. In return, AEMO financially compensates those users for reducing their consumption.

This cost is then passed back to retailers, such as Origin, who then pass the cost to those customers who consumed electricity in that region, at the time of the event. AEMO charges differ depending on the region and customers are charged based on the region their supply is connected to.   

All events are listed on the AEMO website: Market event reports.

How is the Directions charge calculated?

Direction charges are based on purchased load by energy retailers during the event which are then passed through to consumers based on MWh consumption by the customer during the event. Charges are received by the retailers in line with AEMO’s calendar which operates in arrears.

The Direction charge on your Origin invoice has been calculated using your actual usage at the time of the event.


Global settlement and Unaccounted for Energy (UFE)

Australian Energy Market Operator (AEMO) is responsible for settlement in the National Electricity Market (NEM). Its role is to ensure that market generators are paid for the energy they provide, while retailers pay for the energy their customers use.

Understanding UFE

UFE refers to the difference between the amount of energy being drawn into a distribution zone and how much is picked up on the meters that has been consumed by end customers after technical loss factors are applied. There are many possible sources of UFE; these include electrical losses, unmetered loads and estimation errors.

The shift from settlement by difference to global settlement

Since 1998, AEMO has used the settlement by difference method which resulted in the ‘local retailer’ for a distribution area bearing the risk for all ‘unaccounted for energy’ (UFE). This approach has meant that the market was able to operate without the need for expensive metering upgrades for all customers. However, there have been significant changes in metering, with the roll-out of smart meters and advances in communication technology. There has been a significant number of customers that have changed retailers, meaning the concept of using the incumbent retailer was no longer applicable in many jurisdictions.

Global Settlement will mean that AEMO settles the market using the same process for all retailers. This means all retailers will be billed for the energy uncertainties or UFE within a distribution area.

Under the new rule, every retailer will be billed for the loss-adjusted metered electricity that is consumed by their customers within a given region. AEMO will then allocate the UFE to market customers in that local area, pro-rated based on their “accounted-for” energy. These charges will then be passed on to customers by their retailer via their energy rates, or as separate market charges¹.

Global Settlement will officially begin on May 1 2022.

AEMO will oversee the change and has been collecting and publishing data on Unaccounted for Energy (UFE) since October 1, 2021.

Why are you charged UFE?

Under the new rules, the cost of UFE may be passed on to consumers.

AEMO believes that the process will lead to fewer settlement disputes because of the improved ability to identify metering errors and will assist in other areas such as forecasting and the management of distributed energy resources.

For more information, refer to AEMC website or AEMO’s factsheet. 


Is it time to get Solar for your business?

We’ve installed over 1 million panels on the rooftops of Australian businesses and households.