Once electricity has been generated, it is transported to homes and businesses through a network of interconnected high-voltage lines called a transmission network, which transports electricity over long distances. It is then carried by another network of low-voltage lines to customers. Some large industrial users get their electricity delivered directly at higher voltages.
Maintaining and improving these networks to ensure that electricity demand can be met safely, reliably and efficiently requires significant expenditure.
The Queensland transmission and distribution networks provide more than 2 million customers with this essential service. Together, they form part of the National Energy Market (NEM), which operates in Queensland, New South Wales, the Australian Capital Territory, Victoria, South Australia and Tasmania.
Queensland’s transmission network
In Queensland, the transmission network is owned and operated solely by government-owned Powerlink Qld, and is one of five transmission networks in the NEM. They are interconnected and operate across borders, allowing electricity to flow between states.
Queensland’s distribution network
In Queensland there are three distribution networks. The two largest are run by two Queensland government-owned corporations, ENERGEX (south east Queensland) and Ergon Energy (rural and regional Queensland). Essential Energy also operates in the Goondiwindi region near the Queensland–New South Wales border. Each distributor is a monopolist in its region.
Networks and electricity prices
The revenues to be raised via charges by the network businesses are determined by the AER. When we make retail electricity price determinations, we treat those approved network charges as a pass-through to customers.
The AER is primarily responsible for regulating distribution and transmission network service providers, including how much revenue they are allowed to earn and the prices they can charge to recover that revenue.
Our network regulatory role relates to administering and enforcing the Electricity Industry Code, which governs standards for reliability and quality of service for networks and the relationship between distributors and retailers.
Distributors are required to meet guaranteed service levels (GSLs). We review these every five years. The Electricity Distribution Network Code determines how customers must be compensated where a distributor fails to meet a GSL.
Distributors must report every quarter on any payments made to customers for failing to meet GSLs.