Minimum Aggregate Charge Sample Clauses

Minimum Aggregate Charge. EnergyAustralia does not agree with the introduction of a minimum aggregate charge on demand customers and believes it should be removed. JGN justify the introduction of a minimum charge to demand customers on the basis of a “perverse pricing incentive whereby some customers who moved from the volume to the demand market initially experienced a significant price reduction despite the increase in their capacity requirements”5. While recognising that customers can receive a significant saving moving from volume to demand, EnergyAustralia questions whether this is a perverse pricing incentive or whether it is actually the disconnect between the postage stamp volume based pricing system that applies to volume customers and the user pays capacity based pricing system which applies to demand customers. Given the nature of the demand charges they should be a truer reflection of the costs customers impose on the system than the postage stamped volume costs. Therefore, the logic of applying a minimum bill on the demand customers due to the level of volume charges is, in EnergyAustralia’s opinion, flawed. EnergyAustralia notes that in the absence of staging some locations (eg DC-6) the proposed minimum charge will apply to customers up to approximately 110TJ (assuming a 60% load factor6). This means that in that location a 10TJ customer will be paying the same network charges as a 100TJ customer despite the latter customer having demand requirements which are ten times greater than the former7. This, rather than the disconnect argued by JGN, is a clear example of a “perverse pricing incentive”.