Default tariffs for major customers

In accordance with 21.5 of Power and Water Corporation Retail Licence, Power and Water Retail has been nominated the Default Retailer for "Out of Contract Contestable Customers" (OOCC Customers) in the Northern Territory Electricity Market. In accordance with its licence, Power and Water determines the terms and conditions under which OOCC customers are supplied with electricity (default contract).

The overriding principle for these arrangements is contained in 21.2 of Power and Water Corporation Retail Licence:

The licensee must offer to sell electricity to an out of contract contestable customer on terms and conditions considered fair and reasonable in the circumstances by the licensee.

If a complaint is lodged with the Utilities Commission regarding Power and Water's retail default tariff, the Utilities Commission will investigate the claim and will audit Power and Water’s adherence to the principles contained in this document. There can be no complaint regarding the standard terms of the default contract apart from the default tariff.

The following are Power and Water's default tariff principles:

  1. The default tariff should provide an economic incentive for contestable customers to contract in the Northern Territory Contestable Electricity Market.
  2. The default tariff is a bundled rate which covers costs for generation, network, system control and retail activities and margin.
  3. The default tariff should include the additional administration costs associated with servicing this small group of customers.
  4. The default tariff should include factors that reflect the risk associated with:
    • The uncertainty regarding the temporary nature of the electricity supply arrangements; and
    • The creditworthiness of OOCC customers.
  5. Other factors which should be considered are:
    • The geographic location of each OOCC customer;
    • Any specialised electricity supply requirements;
    • The power factor at each OOCC customer’s supply point;
    • The electricity loss factors incurred in supplying each OOCC customer;
    • The opportunity costs for Power and Water Retail.
  6. A factor to cover Power and Water Retail’s renewable energy obligations or any new taxes or charges should be included.
  7. Nothing in the default tariff should disclose or enable calculation of normal confidential cost elements used to prepare commercial offers made by Power and Water Retail.