September 2010

In 1998 Queensland Electricity customers exceeding 40GWH were given the
opportunity to enter the National Electricity Market (NEM). This meant these
customers could investigate opportunities in obtaining better energy charges
as an alternative to Franchise Tariff Rates as gazetted by the Queensland
Government.

Tariff equalisation policy operates in Queensland. This means similar
customers will pay the same Notified Prices whether they are in Brisbane or Mt
Isa.

Notified Prices are controlled and Gazetted by QLD Government. These are
generally reviewed annually. Network Charges and Energy Charges are
bundled together to form a Tariff Rate.

Queensland customers do however have the option to enter the NEM and take
advantage of any cheaper energy costs if available in the NEM or stay on
Notified Prices. Since the market opening in Qld all customers now have the
opportunity to choose Contestability or stay on Safety Net Notified Prices.

Electricity markets have deregulated

Functions of generation, distribution and retail have been separated

Electricity is now a commodity bought and sold like any other

Retailer may change each year with contracts but the Network
provider remains the same.

Franchise or notified priced customer’s new gazetted tariff rates are
published on the 1st July every year. This is a Government
determination.
YOUR
BUSINESS
Retailer
Distribution
Network
Transmission
Grid
Generator
CS Energy
Customer
Ergon
Energy
(EEQ)
Ergon
Energy
Network
(EECL)
Powerlink
Stanwell
Tarong Energy
Enertrade
Origin
Intergen





EEQL is the Host Retailer for all EECL Notified Prices Customers still with
EECL.
EEQL is still responsible for energy sales and associated services (Retail
Franchise Tariffs, Green Credits, Green energy etc) to customers Connected to
EECL.
As per Section 92 of the Electricity Regulations eligible customers may elect to
stay on the safety net Notified Price structure or choose to become a
Contestable customer. Except for those Small Customers consuming below
100MWh's/year, once a site is Contestable the site cannot elect to return to
safety net Notified Price rates (See Regulations for details).
For Customers who have chosen to take up a Market Contract and go
Contestable (Small Customers consuming less than 100MWh's/year) who then
choose to revert back to a Non Market Contract they must remain with their
current Retailer who are obliged to offer equivalent rates similar to Notified
Price rates.
Should an eligible customer elect to become a Contestable Customer the
customer will need to ensure Rules compliant metering is installed and an
Electricity Retail Sales Contract is in place. This can be arranged through the
Customer’s Retailer of Choice.
Overview of Market Structure
Wholesale
Market
Hedge $
Generation
Energy $
Pool $ Connection $
Pool $
Retailer
Retail
Market
Transmission
Grid
Pool
Energy $
Energy kWh
Grid $
Network $
Energy kWh
Distribution
Network
Bill $
Retail Customer
Energy kWh

Markets
◦ Physical Spot market
 Prices set every five minutes - settled on half hourly
average basis.
◦ Contract Market
 Wholesale Market where ‘hedge’ contracts are taken out to
protect participants (users) from pool price volatility.
 Standard hedges for future periods are available, which are
reflected in the Australian Financial Markets Association
(AFMA) daily published rates.
7
Overview Of Market Structure
Wholesale
Market
Hedge $
Generation
Energy $
Pool $ Connection $
Pool
Energy $
Pool $
Retailer
Retail
Market
Spot
Market
Energy kWh
Transmission
Grid
Grid $
Network $
Energy kWh
Distribution
Network
Bill $
Retail Customer
Energy kWh
Overview Of Market Structure
Wholesale
Market
Hedge $
Contract
Market
Generation
Energy $
Pool $ Connection $
Pool $
Retailer
Retail
Market
Transmission
Grid
Pool
Energy $
Energy kWh
Grid $
Network $
Energy kWh
Distribution
Network
Bill $
Retail Customer
Energy kWh
 Understand market entry requirements
 Nominate your Company representative
 Review past electricity use data and provide forecast future use data
 Identify any changes in future electricity usage
 Detail your electricity use patterns
 Conduct a review of your published tariff based price
 Engage Energy Consultant
 Tender for a competitive market price which best suits your needs
 Compare your published tariff-based price with our competitive
market price
 Energy consultant delivers options
 Decide if it is more beneficial for your business to stay on tariff-based
pricing or move into the competitive market