What is the National Electricity Market (NEM)?
Power stations sell their power into this wholesale market then retailers make bulk purchases of power to on-sell to their residential and commercial customers. Sometimes large industrial and commercial customers also buy power directly from the wholesale market.
The NEM is managed by the Australian Energy Market Operator (AEMO), and the rights and responsibilities of all market participants (transmission companies, power generating companies, distribution and retail companies and AEMO) are set out in the National Electricity Rules (NER).
Powerlink cost allocation
The AER issued its Electricity Transmission Network Service Providers Cost Allocation Guidelines (Guidelines) in September 2007 in accordance with the National Electricity Rules.
Each Transmission Network Service Provider (TNSP) is responsible for developing detailed principles and policies for attributing costs to, or allocating costs between or within, the categories of transmission services it provides. These detailed principles and policies must be included in the proposed cost allocation methodology that the TNSP submits to the AER for approval.