The levy is prescribed in the Electricity Industry (Levy of Industry Participants) Regulations 2010.
How we set the levy
Levy rates are set based on the costs of the Authority, the costs of the Energy Efficiency and Conservation Authority (EECA) electricity efficiency programmes and the quantity of electricity generated, purchased and conveyed, plus the number of consumer connections.
Levy rates are calculated in three stages, which are:
Indicative levy rates
We estimate costs and the quantity of electricity generated, distributed and purchased during the year, plus the number of consumer connections. We then use this information to calculate the indicative levy rates for the year.
Invoiced levy rates
Invoiced levy rates are also estimated rates that are published prior to the start of the financial year - once the budgets have been finalised. These rates are used to calculate the monthly levy invoices that we send to industry participants during the financial year.
Invoiced levy rates can be recalculated during the year, but this will generally only happen if there is a significant change in costs.
Reconciled levy rates
After the end of the financial year, we recalculate the levy rates using the actual quantities of electricity generated, distributed and purchased during the year, the number of consumer connections and actual costs.
We use the reconciled levy rates to determine whether industry participants have underpaid or overpaid their levy for the previous financial year. Invoices or credits are then issued.
How the levy is collected
The levy is directly charged to industry participants. They may pass this cost on to consumers - this means a power bill could show the levy, or it could be included in other costs.