Key Points
- Electricity prices will drop for people in NSW, South Australia and Victoria.
- They are set to rise for people in Queensland.
- The changes will come in from 1 July.
Energy customers in NSW and South Australia will see slight reductions in their power bills from July but further rises are on the way for those in Queensland.
The Australian Energy Regulator’s (AER) latest default market offer showed NSW energy users will pay about 1 per cent less in 2024/25, while those in SA will have a drop of 2.8 per cent in the next financial year.
Queensland’s default market offer will increase 4.2 per cent.
And Victorian households will also pay less for their power, with the state’s Essential Services Commission also dropping its pricing recommendations on Thursday following AER approval.
The modest decreases in some jurisdictions follows large energy cost rises in the past two years.
“Electricity affordability remains a top cost-of-living issue for households. Many customers are facing challenges to absorb higher electricity prices in the current economic climate,” the AER said in its decision.
“In recognition of this, the AER has placed increased weight on protecting consumers.”
It comes as the federal government announced in the budget earlier in May it would provide for every household for energy bill relief.
The rebates would see $75 taken off each quarterly bill starting from July.
What do the changes mean in dollar terms for households?
The default market offer applies to consumers in NSW, South Australia and parts of Queensland, and is a price cap on how much retailers can charge customers on their default plans.
Victoria has its own default offer which is applied in a similar way.
However, not all customers are on the default market offer.
AER data shows about 500,000 households across NSW, South East Queensland, and South Australia are on default offers. The Victorian Default Offer (VDO) applies to 340,000 households, and 180,000 on embedded networks where the VDO is the maximum charge.
How much you’ll save depends on where you live and whether you have high-energy appliances that attract a separate meter and tariff — what is known as a ‘controlled load’.
The changes mean power bills in NSW will fall by about $19, and by around $63 in South Australia.
But in Queensland, they will increase by about $83 a year.
The AER said Queensland had the greatest reliance on base contracts due to using them more during summer, which had led to the larger price rises compared to other states.
Earlier this month, the Queensland government on their power bills this financial year.
Meanwhile, Victorians will pay about $100 less on their power bills.
The state’s Essential Services Commission said it had based its decision on feedback from stakeholders, market data movement, and network tariffs before receiving the AER’s tick of approval.
Not all energy energy customers are on default market offers. In Victoria, for example, they make up about 12 per cent.
The offers act as a safety net, and as a reference point to compare prices from energy retailers.
Electricity prices in the ACT and Tasmania are set by regulators in those jurisdictions, while electricity prices in Western Australia and the Northern Territory are set by their governments.
Will small businesses get power bill relief?
Small businesses will also have decreases in their power bills under the default market outcome, with reductions of $402 a year for Ausgrid customers, while Endeavour and Essential Energy users will get a drop of $191 and $43 respectively.
South Australian small business owners will see an almost 9 per cent drop, or $512, to their offer while those in Queensland will see a slight rise of $44.
In Victoria, more than 58,000 will pay a $3530 yearly bill, making for a $260 reduction.
What was the reaction?
Energy Minister Chris Bowen said the offerings showed the retail energy market was stabilising.
“Today’s figures show a welcome downward trend for prices but we know there’s more to do, which is why we’re delivering our reliable renewables plan and providing direct energy relief for every household energy bill,” he said.
“Our reliable renewables plan backed up with storage, flexible gas and transmission, is the only plan by experts to deliver the lowest cost energy where and when we need it to power households and industries.”
Victoria’s energy minister Lily D’Ambrosio said it was a fantastic outcome, but the Victorian Council of Social Service was critical.
“This modest reduction will save households about $2 a week and be quickly obliterated by rising expenses like food, rent and petrol,” chief executive Juanita Pope said.
Source Agencies
