6 June 2022

Canberrans will save on their electricity bills as prices soar around the country

| Lottie Twyford
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Solar farm

The Mt Majura Solar Farm is part of Canberra’s solar highway and creates enough renewable electricity each year to power around 3000 Canberra homes. Photo: File.

Canberrans will save an average of $23 a year on their electricity bills while the rest of the country readies for a ‘perfect storm’ that will set prices soaring

The ACT is the only jurisdiction in the national electricity market where prices will decline in 2022-23, according to the ACT’s Independent Competition and Regulatory Commission (ICRC).

In NSW, power bills are expected to go up between 8.5 and 18.3 per cent.

But in Canberra, from 1 July, ActewAGL’s regulated (standing offer) tariffs will decrease, on average, by at least 1.25 per cent.

Senior Commissioner Joe Dimasi said an average residential customer consuming 6500 kWh would see their bills decline by $23 a year while a non-residential customer consuming 25,000kWh would note a decrease in their annual bill of $88.

For residential customers, that’s a saving of about 44 cents a week.

This bucks a prediction made by the Australian Energy Market Commission in 2020 which forecast annual power bills in the ACT would increase by 2.3 per cent over 2022-23.

At the time, the Commission predicted the states would experience price falls.

Chief Minister Andrew Barr. Photo: Michelle Kroll.

But Chief Minister Andrew Barr said today was not a day of ‘triumph’ but merely the result of good policy decisions made with foresight a decade ago.

“What it does mean for the ACT is relative price stability … it should give Canberrans confidence that not only was this the right decision to take way back in 2012, but it has paid big dividends now,” he said.

“The ACT is well-placed to ride out this challenging period.”

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Canberrans can today thank the Territory’s unique arrangements with renewable energy generators for shielding them from the worst of the price hikes.

The ACT began implementing its 100 per cent renewable electricity target in 2012. Since its first contract with the small Royalla solar farm, it has locked in deals with 10 other generators around the country.

By 2020, it had achieved its 100 per cent renewable energy goal.

Each of those contracts includes a locked-in ‘strike price’ which can either be above or below market value.

When it’s below the market price – which it is now – generators pay the difference to the ACT and Canberra households save.

That scheme doesn’t always save the ACT household’s money, however.

When the strike price is above market value, the network has to pay the generators the difference which translates to higher prices for Canberrans.

Last year, electricity prices increased by an average of $3.76 per week for a typical Canberra household due to a 36.91 per cent increase in network costs.

Mr Barr today said he didn’t anticipate those fixed prices increasing in the future as the costs of renewable energy generation would remain low.

“It’s the upfront infrastructure where the major expense is. The sun … will continue to shine and the wind will continue to blow,” he said.

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But today, the reported price decrease is being driven by a 20.07 per cent decline in the cost of the ACT Government’s feed-in-tariff scheme (the network costs).

This equated to a 4.04 percentage point decline in costs.

However, a 13.65 per cent increase in wholesale energy purchase costs offset the price decrease from the network costs by 3.58 percentage points.

Wholesale energy purchase costs have increased because of higher coal and gas prices reflecting world events such as the Russian invasion of Ukraine, as well as coal power stations coming offline.

A reduction in thermal generation and the slowing of large-scale renewables coming online contributed to the increase in these costs, the ICRC said.

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Minister for Energy and Emissions Reduction Shane Rattenbury said he was very concerned about the state of the global and national energy market.

Mr Rattenbury said the government would continue to encourage local households to transition away from gas, but it wouldn’t necessarily speed that transition up.

The Chief Minister agreed.

“The other challenge that needs to be managed is that at this time of year, gas demand peaks,” Mr Barr said.

“For generations, people have had it drummed into them that gas was the cleaner choice … but it’s not cleaner than renewable electricity.”

“We do need to manage [that transition] in an orderly way.”

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ChrisinTurner2:07 pm 21 Jun 22

Just got an email (21/6) from Origin saying my electricity is going up by 18% and gas by 9%!

Lottie Twyford2:27 pm 21 Jun 22

That will be because it turns out the regulated price (as determined by the ICRC) only applies to ActewAGL’s offers.

See here for more details .. https://the-riotact.com/power-prices-are-falling-but-if-youre-in-an-apartment-you-might-be-in-for-a-shock/568424

If you scroll down to the bottom of that story you’ll find out Origin’s prices are determined differently.

I know it doesn’t really concern the ACT but what if you live just over the border.

You are about to get a rather large increase in what you pay for electricity which is a given.
What if you have solar panels on your roof in NSW? Are you about to get an increase in the rather pitiful 11.4 cents per KWH that you are currently paid?

We are so lucky to have labor in power here in Canberra. See how well they do? Now they also run Federal politics we will see great things

Capital Retro9:33 am 08 Jun 22

Yeah, Albo is overseas riding a bamboo pushbike around a park while the biggest RBA cash rate interest increase in 20 years hits our failing economy and he says he doesn’t comment about domestic things when he is overseas.

This is worse that Scomo being on holidays when the usual 50 year bushfires hit and the media demanded he return immediately.

What a huge double standard.

The long-term strategy of the ACT gov’t transitioning to renewable energy is now paying off in the form of cheaper electricity, but still people find something to whine about. Amazing.

When have Canberrans ever saved on electricity prices.

Well for about 19 out of the last 20+ years our power price has been less than the rest of the country. Something that it seems is set to continue.

JC,
And we should acknowledge that the reason for those lower prices is almost solely to do with the ACT being a single city state with almost zero regional transmission required.

Not having to subsidise lower density regional areas gives us an inherent advantage.

How strange. The usual suspects commenting in green issues on this site are silent. Wonder why?

Dolphins, to be fair, the same people crowing about this outcome were invisible last year when the exact same contract mechanism saw us paying larger increases than the rest of Australia.

Capital Retro2:07 pm 06 Jun 22

More spin than a wind turbine.

Are you complaining we aren’t getting a 20 per cent increase like others are getting CR?

Capital Retro4:05 pm 06 Jun 22

I don’t know about you JS9 but I have pre-price increases locked in for another 12 months.

Whinge when the prices go up because of renewables, whinge when they go down because of renewables. Almost like the facts don’t matter.

And Capital Retro, as we discussed last year, you can’t escape the underlying price increases or decreases no matter which retailer you choose. They are locked in to the distributor and we only have 1 in the ACT. The costs underpin every bill in the ACT and eventually flow through to every deal available for every retailer.

Funny that you were crowing about locking in a price last year when they were going up but now you’ve potentially cost yourself a reduction by doing the same.

No one’s fault but their own if you are on a crap deal….

Capital Retro10:38 pm 06 Jun 22

I’ll be really angry with myself if I miss out on that $23 per year reduction. I could have used that $23 on a down-payment for my Tesla.

The irony of your comment is the reason why this year we are not seeing significant increases like the rest of the country is the exact same reason why you did not see an increase last year. And that is you locked in a contract with fixed rate rate for a given period of time.

Even more ironic is you choose to pizzle the government over having done that even though the benefit of why they did that is now apparent. But not surprisingly you are still complaining.

Capital Retro8:49 am 07 Jun 22

I haven’t complained at all. Can’t you detect cynicism? instead you immediately put on your ACT Government apologist hat for the slightest criticism leveled against them.

And the “benefit” we are not seeing is the fact that renewables should be “free”. Wind and sunshine are “free” but after all the years of taxpayer subsidies and spin the average price continues to rise. Let’s see you defend that.

Well considering the rest of Australia will have increases of hundreds of dollars per year, relatively that $23 reduction is huge for this year.

Seems like you would have preferred to be paying those huge increases rather than ever admit the benefit you’ve received this year due to those horrible renewables that you constantly disparage.

More of a glass always empty approach no matter the contents.

Capital Retro11:42 am 07 Jun 22

I have a property in NSW and the electricity retailer / supplier told me two months ago that my annual bill would now be more than twice it was for the current year. I made a couple of phone calls to other retailers and got a deal even cheaper than the current year one I have and the rates were locked for 12 months. While I was talking to them I locked in the same deal for my ACT supply. I’m saving heaps more than $23.

If your wine glass is empty just refill it.

CR,
The hilarious thing is you still don’t recognise that you’ve just admitted (for the 2nd year running) that you must have been on a horrible electricity deal previously and you were freely paying more than you needed too.

You aren’t “saving” anything, you were previously overpaying because you hadn’t properly investigated the most suitable electricity plan for your individual circumstances (assuming you aren’t telling porkies again).

Either way, what you can’t do in the ACT is negotiate your way out of the price increases or reductions that underpin your electricity bill through the sole distributor in the ACT, Evoenergy.

Every retailer accesses their services and the costs of that access is the same.

Perhaps you’ve been emptying too many of those wine glasses at lunch.

Capital Retro9:48 pm 07 Jun 22

Indeed I had a a horrible electricity deal previously and that was with ActewAGL who were giving discounts of 20% to everyone else in the neighbourhood except me. The special deals for them (all ACT public servants) were done through a “network”.

Contrary to your claim that EvoEnergy is the sole distributor in the ACT, The Australian Energy Regulator says while they are the main one there are others so you are the one that needs to investigate further.

Being a diabetic, I don’t drink alcohol.

Capital Retro,
Sorry but your comments on electricity distribution in the ACT are ill informed.

Whilst Essential Energy and a few others do supply electricity to a few small pockets and border rural customers in the ACT, Evonergy own and operate almost everywhere else, including the entire Urban Area, which covers almost every electricity customer in the ACT.

You can’t choose you distributor, so unless you are in one of those tiny fringe areas, Evoenergy is your distributor.

But at least it’s good to see you admit that you were on a poor deal, everyone should shop around.

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