The Reliability and Reserve Emergency Trader (RERT) charge is a new charge issued by the Australian Energy Market Operator (AEMO). AEMO advises that this charge is to maintain power system reliability and system security using reserve contracts.
Here at WiseUp Energy Solutions, we have dug a little deeper for you to answer the more common questions relating to RERT.
Why did AEMO introduce RERT?
- AEMO is bound by the National Electricity Rules (and there are many rules!) One of these rules states that AEMO must take all reasonable actions to ensure the reliability of supply by negotiating and entering into contracts to secure the availability of reserves under reserve contracts.
- This basically means that when the available electricity supply in the market is less than the forecast Demand, AEMO steps in to ensure that additional capacity is made available to the grid. This is called a ‘RERT event’.
- This additional capacity can be found by either shutting down large power users (think steel manufacturing or aluminium smelters) or by bringing in additional generation.
What are some examples of RERT events?
RERT events could be anything from a bushfire, heatwave, or equipment failure such as last year’s generator explosion at CS Energy’s Callide C coal-fired power station.
How does AEMO pass on the RERT charges to Retailers?
- There are two components that are passed on
- Usage or Activation Charges (when a service is activated)
- Other or fixed charges (AEMO payments to participants to be available if network stabilisation is required)
How does AEMO calculate the RERT charges?
- The calculations are based on your consumption during the RERT period multiplied by the rate per MWh during the RERT event[1] plus Other/Fixed charges [1]
- [1] As determined by AEMO
What does that really mean for my business energy bill?
- You will see an additional line item on your bill, most likely in the additional charges and credits section.
- It will look like this. ‘AEMO RERT Charge – Jun 2022’
- Your bills will increase due to this charge
When will these charges start appearing on my bill?
RERT charges started appearing on Business Energy bills in December 2019.
Will they be charged as a percentage of my bill, or will they be a flat rate charge?
- RERT charges are not a percentage of your bill.
- RERT charges are not set at a flat rate.
Does my usage impact the amount I am charged for RERT?
Yes, your usage is factored into the RERT charges but only for the period of your usage within the time of that event. So, if AEMO had to call on reserves between 5-6 PM on Mon, 1st August, only your usage within that window would have any bearing on your RERT charge.
What else impacts the RERT charges on my bill?
- As above, each RERT event has a specific date/time/duration.
- AEMO determines the price for MWh during that event and any ‘other/fixed’ charges’
- This means it is impossible for businesses to predict and budget for RERT charges as they have no control over the frequency and duration of events, nor the rates and charges that AEMO will pass onto Retailers.
Can I modify my behaviour to reduce RERT charges on my my electricity bill ?
- Not specifically.
- Every business should have plans in place to keep their energy costs as low as possible. This could be through
- Getting better rates
- Timing the market for procurement
- Tariff optimisation
- Energy efficiency
- Solar
- Power factor Correction
- Voltage optimisation
- Creation of an energy cost management strategy for multi -site businesses
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