Managing electricity price volatility

摘要

Electricity prices and price volatility in the Australian National Electricity Market have both increased significantly over the past two years, driven by transformational changes to the electricity generation mix and fuel costs. Electricity costs represent 30% of Lower Murray Water’s rural irrigation business controllable costs. Therefore, the increased prices and volatility represents a major risk to the corporation and its customers. Lower Murray Water has collaborated with its customers and worked closely with the regulator, the Essential Services Commission, to develop an electricity price collar mechanism designed to protect the sustainability of the rural business from electricity price volatility.