A typical Canberra household’s power bill will rise by about $300 for the year under a 14 percent hike in electricity prices announced on Thursday by the Independent Competition and Regulatory Commission.
The ICRC released its annual update of regulated retail electricity prices for the financial year beginning 1 July 2018, setting the maximum average nominal increase in ActewAGL Retail’s basket of regulated tariffs for 2018-19 at 14.29 percent.
It said that if ActewAGL Retail increased prices by the full 14.29 per cent, this would translate to an increase of up to $299 in the annual bills (or about $5.73 a week) for a typical Canberra household consuming about 8,000 kWh per year.
The ICRC said most of the reasons for the rise were outside of ActewAGL’s control and were the result of higher wholesale electricity prices and the higher cost of national green schemes, fueled by the greater than expected take-up of residential solar energy.
“The large increases in Australian wholesale electricity prices that occurred in 2016 and 2017 are still pushing up ACT electricity prices. While wholesale prices have fallen slightly over the past few months, they are still 50 per cent higher than in May 2016,” Senior Commissioner Joe Dimasi said.
“The Commission’s method of smoothing out large changes in wholesale prices means that ACT retail prices have not increased as much as in other parts of Australia. But there is now a ‘catch-up’ in retail prices in the ACT as the wholesale price increases that happened in 2017 continue to flow through into retail prices.”
The ICRC said higher wholesale electricity purchase costs contributed more than half of the total retail price increase (7.80 percentage points of the total 14.29 percent increase). The national green schemes administered by the Clean Energy Regulator contributed more than a third of the total retail price increase (4.12 percentage points).
ActewAGL’s retail operating costs will fall by 4.42 percent in 2018-19.
The ICRC said that despite the increase in regulated retail prices in 2018-19, electricity bills for ACT residential customers would remain among the lowest in Australia.
“I recognise that the large increase in retail prices in 2018-19 will place financial pressure on ACT residential and small business consumers,” Mr Dimasi said. “However, it should be noted that these are maximum price increases and I encourage consumers to talk to their retailer about whether they are on the right electricity plan for their circumstances and to seek assistance if they need it.”
The ACT Government blamed the price rise on a lack of market certainty that was causing under investment in power generation and leading to a shortfall in supply. It also defended its renewable energy policies.
“The ACT is part of a National Electricity Market, and the bulk of today’s announced increase is outside the control of the ACT Government. However, ACT households and businesses will continue to have some of the lowest cost and most reliable electricity supplies in the country. Canberrans will still be paying hundreds of dollars less per year compared to our neighbours in New South Wales,” Deputy Director General, Sustainability and the Built Environment, Geoffrey Rutledge said.
Mr Rutledge said the ACT’s renewable energy scheme costs would also remain well below the $5.50 per household per week previously estimated, and the Government remained confident that this would decline after peaking in 2020.
He said the ACT Government remained committed to renewable energy and would continue to invest in sustainable electricity generation.
The Government would again join with ActewAGL to provide a support fund of $500,000 for Canberrans struggling with their power bills, and he urged consumers to talk to their energy provider about getting the best deal to meet their needs, or to shop around for a better offer.
“Last year the St Vincent de Paul Society found that Canberrans could save over $200 on their electricity costs simply by switching to a lower priced plan. Online comparator tools like www.energymadeeasy.gov.au are available to help customers check that they are on the best electricity plan for them,” he said.
“Saving energy has never been more cost effective. The ACT Government’s Energy Efficiency Improvement Scheme has assisted over 71,000 households and businesses, including 18,000 low income priority households, to cut their energy bills.”
Visit www.actsmart.act.gov.au or call 13 22 81 for information and advice on the energy savings opportunities available.
From 1 July, the Utilities Concession for eligible low-income households increases from $604 to $654 per year to assist with electricity costs.