Power bills to dim: see what you will save

Ian Bushnell 5 June 2020 7
Renewable energy

Renewable energy is driving cheaper prices: Photo: File.

ACT power bills are on the way down, thanks to the growth in renewable energy driving down the price of wholesale electricity.

A typical Canberra household will save $43 on its bill in 2020-21, according to the ACT Independent Competition and Regulatory Commission which today released its final decision on regulated retail electricity prices for the next four years from 1 July 2020.

It has also recommended measures to make it easier for customers to understand and compare electricity offers in the ACT.

“The final decision means that a typical customer on ActewAGL’s standing offer contracts will see a 2.56 per cent reduction in retail electricity prices in 2020-21,” said Senior Commissioner Joe Dimasi.

This is equivalent to a decline in real terms (adjusting for inflation) of 4.31 per cent.

“For the average residential household consuming about 6,500 kWh per year, the expected price decrease would translate to a reduction of $43 in their annual bill,” Mr Dimasi said.

”The impact on non-residential customers ranges from a reduction of $265 per year for a large customer to $66 for a small customer,” Mr Dimasi said.

The ICRC says the average retail price decrease largely reflects falling prices in the wholesale electricity market, driven mainly by the growth in renewable energy generation.

This has led to a reduction in the cost of wholesale energy purchases and national green schemes.

The final price decrease of 2.56 per cent is lower than that estimated in the ICRC’s draft report, due mainly to higher network costs which increased by 5.4 per cent following the Australian Energy Regulator’s May decision.

The ICRC says that despite the fall in retail electricity prices, many consumers could still find it difficult to pay their electricity bills, especially in the current challenging economic conditions.

The Commission encourages consumers experiencing financial hardship to contact their retailer for assistance, and to shop around for more affordable electricity plans.

The report makes two recommendations to the ACT Government to make it easier for ACT consumers to do this.

“First, it recommends setting a reference bill for a typical consumer to help consumers compare plans,” Mr Dimani said. ”The second recommendation is that retailers should have to tell their customers if they have a plan that could reduce a customer’s bills and ask the customer to call them for more information.”

Many ACT consumers find it difficult to compare offers, mainly due to the large number of offers and tariff types, the discounting practices of retailers, and the complexity of terms and conditions in plans.

The ICRC is also encouraging retailers to regularly tell their customers that they can visit the Australian Government’s Energy Made Easy website to check whether there is an even better offer available from another retailer.

The Commission has surveyed more than 1,000 ACT electricity consumers and consulted with electricity retailers, consumer groups and the ACT community.


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7 Responses to Power bills to dim: see what you will save
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HiddenDragon HiddenDragon 6:12 pm 05 Jun 20

”The second recommendation is that retailers should have to tell their customers if they have a plan that could reduce a customer’s bills and ask the customer to call them for more information.”

Long overdue – far too much time and effort is expended on marketing (which often feels more like game-playing) with what is, for most people, just a basic service.

Creating “markets” and allowing competition for things which used to be monopolies can have benefits, but it all becomes a bit pointless if too much of the gains (if they actually happen) from market forces are wasted on marketing and other artefacts of markets.

MERC600 MERC600 12:24 pm 05 Jun 20

$43 a year saving. 82 cents a week.
I guess it’s better than going up 82 cents a week, or eleven cents a day.
Rome wasn’t built in a day, or some other saying I can’t quite think of at the moment.

and PS. I knew I should have taken a photo of petrol when it was 99 cents a litre. Now around a $1.10. Was there a middle east disturbance I missed out on ?

Acton Acton 11:08 am 05 Jun 20

This is misleading because from 1 July the feed-in tariff for ACT residents will be reduced so anyone with roof top solar panels will receive a very much reduced electricity credit and so an increased electricity bill. I estimate about a 40% increase in my electricity bill from the reduced feed-in tariff, which ActewAGL could not deny.

    JC JC 12:04 pm 05 Jun 20

    So what you are saying is your extremely generous solar feed in tariff that was significantly more (about 3-4 times the base rate) than the retail price of electricity has lapsed and now you are going back to the rate that everyone not on the generous scheme gets. Noting of course that scheme had a finite and well advertised life?

    Is that about right?

    JS9 JS9 12:05 pm 05 Jun 20

    That is simple market supply and demand. People with feed-in tariffs in many cases have got an exceptionally good deal, for many subsidised by all other users. Moving towards a more normal setting for those people imho is a good thing.

    Acton Acton 3:12 pm 05 Jun 20

    It is deception. Consumers were induced to buy expensive solar panels to generate extra power for the grid and the community with the panels to be subsidised from a feed-in tariff. Now the electricity supply company is gaining the benefit of these additional panels before consumers have broken even on the cost. You have mistaken monopoly power for market economics.

    chewy14 chewy14 8:38 pm 05 Jun 20

    How is it deception for you to be offerred a short term deal which has been honoured exactly as required?

    Did you sign a long term deal that hasn’t been met?

    No.

    And you realise that the good deal you were previously receiving was subsidised by other customers right?

    If you are going to take such massive increase on your electricity bill, it’s almost certain that a battery storage system would be economic for you to install.

    Oh, and why do you think that the electricity supply companies benefit from the proliferation of small household solar systems? They are far less efficient than large scale systems both for renewable and fossil fuel generators. You’re actually getting paid the value of the electricity you produce whereas previously you were being subsidised by others.

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