The energy market is made up of three different tiers:
- Generators – these are the companies that own power stations, hydro stations, windmills, solar panels and natural gas plants. These power companies generate most of the energy that we use in Australia and release it to the national electricity market (managed by NEMMCO) where it is pooled and bought by electricity or gas suppliers and companies who are responsible for ensuring they buy enough energy to supply their customers like you. Generators you may recognise include;
- Energy Brix Australia (Morwell, Victoria)
- Loy Yang Marketing Management Company (Victoria)
- Snowy Hydro Ltd (Australia's Southern Alps, Victoria)
- TRUenergy (Canowie, South Australia, Latrobe Valley, Victoria)
- AGL (Australia)
- Macquarie Generation (Upper Hunter Valley of NSW)
- Origin Energy Ltd (Australia)
- Distributors – these are the companies (separate from the generators and electricity suppliers) that own the power poles, the wires and gas pipelines. They ensure that your power and gas is physically delivered to your house or business. Your electricity bill and your gas bill from your electricity supplier or gas company includes a daily "Supply Charge" that your electricity company or gas supplier will pay to the distribution company. Such companies include;
- Powercor Australia (Victoria)
- SP AusNet (Victoria)
- CitiPower (Melbourne)
- Essential Energy
- Energex (QLD)
- Alinta (Australia)
- Retailers or Suppliers – these are the companies that are responsible for ensuring that they monitor your electricity or gas consumption, bill you for the electricity and gas you consume in your home or business, and then buy enough power or gas from the national generators to cover your consumption.
All these functions used to be performed by a few very large state-owned enterprises. In NSW for example, if you live in South Western Sydney, your electricity was probably distributed and supplied by Integral Energy. If you live in Adelaide, these functions were performed by AGL SA and in Melbourne by AGL. Now there are a number of different generation and distribution companies that households and businesses no longer deal directly with.
As a result of the introduction of full retail competition in recent years there has been an increase in the number of electricity and gas suppliers in the market. These electricity and gas suppliers are increasingly competing for your business. Electricity consumers have progressively gained the right to choose and compare the cheapest most competitive electricity deals from their own supplier and switch between competing electricity companies or gas suppliers. All this is good news for you whether you are trying to save on your living costs or control your business’ budget. If you haven’t negotiated a new agreement or market contract with a new energy supplier or your existing electricity or gas supplier, you will still be on a regulated rate. This means that the price that you are charged for your electricity and gas is set by the government’s industry regulator in your state.