Electricity invoices for Large Market customers (typically customers who spend $15K or more per annum) are relatively complex. They contain plenty of good information, but the information is hard to find and the invoices can appear confusing. Invoices can be loosely divided into two components: negotiated and regulated.

The negotiated segment of the bill includes the retail rates, the environmental levies, the metering fees, and the cost of any additional green energy that you may wish to purchase.

The raw retail rates that you negotiate with the retailer of your choice and are usually the main focus of the electricity negotiation process. They are quoted for peak, off peak and depending on your location, shoulder periods, and free of line losses. Your electricity bill will show the agreed rates multiplied by the loss factors.

The environmental levies include the LREC (Large Scale Renewable Energy Certificate) and the SREC (Small Scale Renewable Energy Certificate). Some state also apply additional levies such as the ACT AEEC (ACT Energy Efficiency Certificate), NSW NESC (NSW Energy Something Certificate), VIC VEEC (VIC Energy Efficiency Certificate), etc.

It is important to note that the regulatory regime covering these levies does not regulate a retail pass through cost. The regime specifies participation levels for the retailers and penalty costs for non-compliance. Within this ceiling the retailers are free to manage their compliance costs and pass these costs through to their clients as they see fit. There is often significant differences between the compliance costs passed onto customers by the retailers and this should be considered when negotiating electricity supply contracts.

Large market electricity customers are required by regulation to have a Type 4 interval meter. These meters, colloquially known as 'smart meters' or T4 meters are capable of being read remotely. The cost of supplying and reading these meters is usually passed on by the retailer, unless there is an agreement with a metering provider.

Conversely, delivered domestic electricity prices are probably closer to $200/MWh so we can expect an increase of about 10%.

These fees are collected by the retailer on behalf of the Local Network Service Provider (LNSP) who owns, operates and maintains the 'poles and wires' that deliver the electricity to your door. Depending on your location, voltage and energy use pattern these fees will probably cost anywhere between $25/MWh and $40/MWh. In many cases there will be a choice of NUoS tariff and selection of the least cost tariff can mean significant savings.

For many users this is the smallest part of their electricity account with a cost ranging between $1.50 to $10 per MWh. Part of this will go to the Market Operator (AEMO) to recoup their costs and part will go towards the cost of providing ancillary services. Unfortunately, the cost of ancillary services varies each week, thus most retailers will bill an estimated cost for ancillary services and undertake an annual cost wash up.

For more details on the tariff definitions in your area refer to Tariff Definitions.