Ancillary Services Charges to Customers in South Australia

by Energy Action | Dec 02, 2015
Customers in South Australia may see increases in the Ancillary Services component of their bills over the next few months
Ancillary Services cover a range of services that are purchased by the Australian Energy Market Operator  (AEMO) mostly from generators. These services are required for the electricity market to operate properly in real-time. One of the most important services is Frequency Control Ancillary Services (FCAS).

AEMO explains FCAS as ancillary services concerned with balancing, over short intervals (shorter than the dispatch interval), the power supplied by generating units and the power consumed by loads. This imbalance is managed by monitoring the power system frequency.

This means, under this service some generators voluntarily hold a small amount of their available capacity in reserve in order to meet sudden surges in electrical demand should these occur. By doing this the generators forgo the opportunity of earnings for generating electricity from the withheld capacity. As an incentive to offer this service the generators instead receive a payment from AEMO over and above those received for the normal generation and sale of electricity.

During November a number of unusual events in the South Australian market meant that AEMO had to purchase much larger quantities of FCAS and at much higher prices than under normal conditions. AEMO recovers the cost of these purchases from the retailers who in turn recover it from their customers through a variable AEMO Ancillary Charge which will appear as a single line item on your bill.

As AEMO recovers these higher than expected costs customers in South Australia may see increased amounts for AEMO Ancillary charges appearing on their invoices. This is not expected to be a regular charge, but rather will only appear until costs are recouped.
Importance of Bill Verification
If you have a contract management service with Energy Action (EnergyMetrics or Activ8), please send through your recent electricity bills for validation. These can be sent to your Account Manager or to the email account.

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