The electricity tariff consists of four components, including energy costs paid to power generation companies, and network costs paid to SG Group to recover the cost of transporting electricity through the power grid.
There is also a market support fee paid to SP Group that recovers the costs of billing and meter reading, as well as a fee paid to the energy market company that recovers the costs of operating the electricity wholesale market and power system.
The energy costs component is adjusted quarterly to reflect changes in the cost of fuel and power generation. The fuel cost is the cost of imported natural gas, which is tied to oil prices by commercial contracts.
The cost of power generation covers mainly the costs of operating the power stations, such as the manpower and maintenance costs, as well as the capital cost of the stations.