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REMCo generates revenue to cover the capital and operating costs associated with administration of the Retail Market Rules (the "Rules"), from its members in three forms:
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a Registration Fee; |
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an Annual Fee; and |
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a Market Share Charge. |
This approach to cost recovery is defined in the Chapter 8 of the Rules. The fees are set by the REMCo
Board & Members .
The Registration Fee is a one-off charge on all Members, payable on joining REMCo; and the Annual Fee is an annual charge levied on all members. These fees are set low enough so as not to create a barrier to entry for new participants, but sufficient to ensure that members are serious about operation in these markets.
The Market Share Charge makes up the largest proportion of the cost recovery and is only levied on gas retailer Members. This fee is levied monthly and is based on market share determined under the Rules, determined by the number of delivery points a retailer is responsible for in each jurisdiction.
REMCo operates on a cost-recovery basis only, specifically not generating surpluses year-on-year. Any excess surplus from operations is returned to Members as a reduction in fees in future years. To assist the Members, in particular the retailers, in managing their annual cash flows, REMCo attempts to maintain a stable fee base throughout each year. However, REMCo reserves the right to adjust these fees in order to match actual costs incurred.
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