There are many factors that affect the costs of delivering gas and electricity to you. Here we break them down for you.
As an energy retailer, we are the face of the industry to our customers. Our business activities include purchasing wholesale energy, purchasing network services from Distributors to transmit energy to homes (and requesting other Distributor services on behalf of our customers such as connections and disconnections), and calculating and sending energy bills.
We also assist customers with queries about their energy plans, usage and bills, manage our compliance obligations, and reinvest in our business to ensure that we can continue to be innovative and provide helpful solutions to our customers.
Below we break down the costs that AGL incurs in delivering energy to you.
Wholesale market costs
This is the amount we pay to purchase sufficient gas and electricity to supply our customers. Electricity can be bought directly from a wholesale electricity market where all businesses that generate electricity sell their output. Gas can be bought directly from gas extraction and production plant operators. These fuels can also be bought indirectly through energy trading markets. The price of wholesale energy is determined by conditions in the wholesale market including supply and demand conditions.
The costs charged by distributors to transmit energy to homes via electricity poles, wires, gas pipes and meters. AGL pays distributors for the cost of delivering energy to you. The network costs associated with transporting electricity and gas from their generation or production source to homes and businesses make up the largest part of customers' energy bills.
AGL incurs other costs in supplying energy to you, such as costs of complying with a range of Federal and State government programs. Common examples of this include renewable energy targets and energy efficiency schemes.
These are the costs to a retailer in selling energy to your homes. AGL has direct and indirect costs in arranging the supply of wholesale energy and network services, complying with regulations, providing customer service and other costs in running the retail business. The cost of doing so is recovered through our energy rates.
For information on how these costs relate to the different types of energy charges on your bill, please see our FAQs below.