Management
Issue No. 7 - October/November 2002
The Current Situation
by Carolyn Mitchell
The National Electricity Market (“NEM”) is an open access wholesale electricity market encompassing the Eastern States and South Australia which commenced in South Australia in December 1998.
The NEM arrangements originated in commitments by the Council of Australian Governments in the early 1990’s to competition policy reform and culminated in NEM legislation agreement in May 1996 between the participating jurisdictions.
At the same time, the South Australian government was engaged in a process of disaggregation of the old Electricity Trust of South Australia (ETSA) and lease of those individual assets.
Currently, the major participants in the South Australian market are:
- Generators
- TXU Torrens Island, NRG Flinders
- Northern & Playford, National Power
- Pelican Point and various smaller peaking plants.
- Transmission
- Electranet – Regulated monopoly.
- Distribution
- ETSA Utilities – Regulated monopoly.
- Retailers
- AGL (formerly ETSA Power)
- Country Energy
- CitiPower
- Origin Energy
- AusPower
- TXU.
- Interconnector – Heywood from Victoria.
Electricity customers have been introduced to the NEM gradually depending on their usage of electricity. On 1 January 2003, full retail contestable duty (“FRC”) will commence, meaning that all electricity customers will have access to the NEM. All customers will be able to choose their electricity retailer and enter into a contract with that retailer to purchase electricity.
Retail electricity contract
A retail contract is an agreement between a retailer and a customer whereby the customer agrees to purchase electricity from a retailer for a certain price. The customer must also pay charges for use of the distribution system, use of the transmission system and various market participation fees imposed by the operator of the NEM, NEMMCO.
The en...
