Understanding AEMO’s budget and fees for 2023-24
Understanding AEMO’s budget and fees for 2023-24
In June, the Australian Energy Market Operator (AEMO) announced its final budget and fees for 2023-24. With inflation in every area of the Australian economy a real concern for Commercial and Industrial organisations, let’s take a look at the budget and what this means for businesses.
What are the new fees?
AEMO has confirmed the National Electricity Market (NEM) benchmark fee for 2023-24 is $1.162 per MWh, which is a modest increase of 5% from 2022-23 fees. It includes NEM fees and FRC (Full Retail Contestability), ECA (Energy Consumer Australia), DER (Distributed Energy Resources Integration Program), as well as IT fees.
Following the Electricity Market Participant Fee Structure review in 2020, changes to the way payments are applied come into effect from July 2023. This includes the addition of new weekly fees per NMI for all market customers. In SmartestEnergy invoices this will be displayed as a per-day fee in line with our other charges. Whilst the addition of a new fee initially seems concerning, this is in conjunction with a much-reduced consumption-based charge ($/MWh), leading to only a slight increase in the total pool fee applied.
All fees are broken down by who’s paying for them, into three categories; market customers (retailers), wholesale participants and scheduled generators. Wholesale participants are a new category from the 2022-23 budget and includes generators, market network service providers, small generator aggregators, and market ancillary service providers / demand response service providers.
What’s behind the price increase?
As with all market impacts, there is no one factor that is the only reason for increases, however changing structures and alignment of charges has kept the impact of inflation from having an outsized impact. Existing reform packages are underway, as we deal with an evolving power supply mix, ageing infrastructure, developing technologies, weather impacts and planning for a sustainable and reliable energy future.
Need to know more?
All customers will see an increase in AEMO mandated charges on their invoices and while these fees constitute a small proportion of total charges - around 0.3% - 0.5% - we appreciate many businesses will feel the impact of this cost pressure at a time when prices are rising across the board.
If you would like to discuss AEMO’s budget and fees in more detail, what impact it will have on your business and how you can help mitigate the rising cost of energy, please get in touch here.