Canberrans can expect some “very good news” regarding electricity bills this year despite skyrocketing prices elsewhere.
Power bills in NSW are set to increase by an average of $119 to $227 from 1 July, but Chief Minister Andrew Barr has suggested the ACT will buck the trend.
“We have effectively locked in a fixed price supply, so it means ACT residents would be shielded from those increases, so watch this space – I think there’s some very good news coming,” he told ABC Radio on Friday (3 June).
The ACT Government has signed contracts with 11 renewable energy generators here and in NSW, Victoria and South Australia, effectively paying them for the megawatts we use; hence the claim the ACT runs on 100 per cent renewable electricity.
Embedded in each of these 10 to 20-year contracts is a ‘strike price’. The ACT’s electricity distributor, Evoenergy, pays each generator for their energy based on the difference between the current wholesale price (which varies every five minutes) and the strike price.
When wholesale electricity prices are low, this requires Evoenergy to pay the generator, and when electricity prices are high, the generator pays Evoenergy.
This arrangement helps shield ACT consumers from high electricity prices.
When there are costs, Evoenergy passes them on to consumers in the form of ‘network costs’, which comprise about 43 per cent of the total residential retail bill. Network costs (or supply costs) are how much it costs to get electricity from the power station to your home or building and includes the cost of building, operating and maintaining electricity poles and wires.
The national energy watchdog, Australian Energy Regulator (AER), has approved Evoenergy’s pricing proposal for network costs from 1 July 2022 to 30 June 2023.
The ACT electricity network charges are set to fall, on average, by 10 per cent from 1 July 2022.
This translates to a decrease in annual electricity network charges of about $90 for the average Canberra resident consuming 7,500 kWh.
“We estimate that, based on our decision, the network component of the typical bill for Evoenergy’s customers to be $81.20 lower for households and $444.46 lower for small businesses in 2022–23 compared to 2021–22,” an Evoenergy spokesperson said.
Last year, ActewAGL was permitted to increase retail electricity costs by an average of $3.76 per week for a typical Canberra household consuming 6,500 kWh per year. This was due to a 36.91 per cent increase in network costs.
The ACT Independent Competition and Regulatory Commission will hand down its 2022 to 2023 update to electricity prices on Monday, 6 June.