Commercial energy glossary (Electricity & gas terms explained)

The rule-maker for Australia’s electricity and gas markets. The AEMC develops and maintains the National Electricity Rules and National Gas Rules.

Operates Australia’s electricity and gas markets and manages system security and settlement processes.

The regulator responsible for enforcing energy market rules and overseeing network pricing determinations.

Costs associated with maintaining grid stability and system services.

A measure of total power supplied to a site, used in demand charge calculations.

The core unit price charged per kWh (electricity) or per GJ (gas). It reflects the wholesale cost of electricity or gas, the retailer's hedging costs, and the retailer's margin. It excludes network, environmental, and metering charges.

A contract combining electricity and gas supply under a single agreement.

The maximum electricity output available within the generation and transmission system.

C&I customers are usually billed monthly and can access more sophisticated pricing options, including contracts priced against wholesale market conditions and the ability to lock in pricing for future periods. Unlike SME plans, C&I contracts are locked in for a fixed term, typically between one and five years. This is a benefit rather than a drawback: fixed-term contracts generally offer lower rates than SME plans, and for businesses using above the threshold, a C&I contract is typically more economical than remaining on a small market retail structure.

An intermediary that helps businesses compare retailers, run competitive tenders, and negotiate electricity and gas contracts. Find out more.

Remuneration paid to a broker by a retailer, typically incorporated into the contracted retail rate.

A business that has the ability to choose its electricity or gas retailer within a competitive market.

The agreed duration of an energy contract, commonly ranging from one to three years for commercial customers.

The total electricity (kWh) or gas (GJ) used over a billing period.

Electricity charges based on the highest level of power drawn (kW or kVA) during a specified billing period. Demand charges are a component of the network tariff structure and are passed through to the customer as a non-contestable cost, regardless of which retailer supplies the site.

A regulated electricity price cap that applies to certain small customers in the National Electricity Market. Find out more.

The local infrastructure that delivers electricity or gas from high-voltage transmission systems to end users.

The use of data, analytics and monitoring tools to understand and optimise energy usage. Energy intelligence typically involves analysing interval data, identifying consumption patterns, forecasting demand, and informing procurement or efficiency strategies. Find out more.

The practice of reducing energy consumption while maintaining the same level of operational output. In a commercial context, energy efficiency may involve upgrading equipment, optimising processes, improving building systems, or reducing peak demand to lower electricity and gas costs. Find out more.

A private electricity network serving multiple tenants within a single building or site.

The structured process of sourcing and contracting electricity or gas supply for a business. Find out more.

A licensed entity that sells electricity or gas directly to customers under retail contracts.

Costs associated with the retailer's obligations under renewable energy schemes and emissions programs, such as the Large-scale Renewable Energy Target (LRET) and the Small-scale Renewable Energy Scheme (SRES). Unlike network charges, environmental charges are a contestable component: the actual cost to the customer varies between retailers depending on how each retailer manages its renewable purchasing and trading strategy.

Services used to maintain stable electricity grid frequency and system reliability.

A contract where the energy unit rate remains constant for the duration of the agreement.

Wholesale market pricing for future supply periods, which influences retail contract offers.

A unit of measurement for natural gas consumption.

High-pressure pipelines that transport gas across regions before it enters local distribution networks.

An accredited renewable electricity purchasing option available to customers.

A financial instrument used by retailers to manage exposure to wholesale energy price volatility.

Detailed energy usage data recorded at regular intervals, typically every 30 minutes.

A gas contract that allows supply interruptions during system constraints in exchange for discounted pricing.

A unit of electricity consumption representing one kilowatt of power used for one hour.

A unit of power measuring instantaneous electricity demand.

A unit of apparent power used when calculating certain demand charges.

A high-usage business customer with full retailer choice in the competitive market.

A representation of a site’s energy usage pattern over time.

Adjustment factors applied to account for energy losses during transmission and distribution.

The portion of the retail rate that represents the retailer's cost of managing wholesale price risk (hedging), operating costs, and profit. Distinct from the wholesale cost component of the rate.

A retail energy contract negotiated within the competitive market.

A unique identifier assigned to a gas supply point.

A group of business locations managed under coordinated energy procurement. Find out more.

The interconnected wholesale electricity market covering eastern and southern Australia.

The charge structure applied by a distribution network operator for using electricity transmission and distribution infrastructure. Network tariffs are assigned to a site by the distributor based on its load characteristics. They are not selected by the business or negotiated with a retailer, and the charges pass through to the customer regardless of which retailer is contracted.

A unique identifier assigned to an electricity connection point.

Energy contract costs that are passed directly to the customer rather than absorbed by the retailer. Pass-through charges include network tariffs (which may include demand charges, consumption charges, and fixed supply charges depending on the assigned tariff) and charges levied by AEMO for operating the wholesale market, such as settlement and ancillary service fees. These are set by regulators or network operators and are identical regardless of which retailer is contracted. In some wholesale-aligned contract structures, exposure to spot market price movements may also be passed through.

The highest level of electricity usage recorded during a defined billing period.

The coordinated management of energy contracts across multiple sites or jurisdictions.

A formal agreement between a business and an energy retailer for electricity or gas supply.

A rate automatically applied when a contract expires without renewal, often less competitive than negotiated rates.

The group of energy retailers engaged during a competitive tender process. See ours.

An additional amount incorporated into pricing to account for wholesale market volatility.

The financial reconciliation process between retailers and market operators.

In the energy market, a SME typically refers to a business that falls below the threshold for accessing wholesale market contracts: less than 40,000 kWh per year in VIC, less than 100,000 kWh per year in NSW, QLD and ACT, or less than 160,000 kWh per year in SA; or spending under approximately $3,000 per month on energy. SME customers are generally billed quarterly and supplied under small market retail structures. Unlike large business energy contracts, SME plans are not locked in for a fixed term, meaning customers can compare offers and switch retailers at any time. Find out more.

The wholesale market where electricity or gas is traded in real time.

A basic regulated electricity offer available to certain customers. Find out more.

A contract clause requiring payment for a minimum volume of energy regardless of actual usage.

A structured competitive procurement process where multiple retailers submit pricing offers.

A pricing structure where electricity rates vary depending on time of day.

High-voltage infrastructure transporting electricity over long distances.

A contract structure where energy supply and network charges are separated.

A regulated electricity price set by the Essential Services Commission in Victoria. The VDO acts as a price cap for certain small customers and provides a reference point for comparing market offers. Find out more.

The risk that actual energy consumption differs from forecast usage.