Power bills to soar as renewable energy scheme cost triples

Ian Bushnell 7 April 2021 58
Peter Billing

Evoenergy General Manager Peter Billing explains the coming price rises. Photo: Ian Bushnell.

The falling price of wholesale electricity due to the impact of renewable generation and the ACT’s 100 per cent renewable energy scheme have collided to ironically produce an expected big hike in ACT bills from July.

Under Evoenergy’s pricing proposal for the next financial year, average residential customers face a 36 per cent rise (around $5 a week) in the network charge on their electricity bill, while average businesses will be hit with a 41 per cent rise in network charges (around $32 a week).*

Big business will face a 46 per cent rise in network charges (around $7,300 a week).

Evoenergy says it has no control over the so-called ‘jurisdictional charges’ to do with the large-scale Feed-in Tariff scheme associated with the ACT’s contracted solar and wind generators providing the Territory with 100 per cent renewable electricity.

General manager Peter Billing said that with the electricity spot price falling over the past 12 to 18 months, Evoenergy now has to make up the difference between the spot price and the higher contracted price.

“So if the spot price is lower than the contracted price, then we’re actually paying the difference between those two prices, which is on behalf of the ACT Government, and the only way that we can recover that is back through our network charges,” he said.

“This isn’t part of our business operation, it’s something that we administer on behalf of the ACT Government, and therefore any of the contract arrangements are things we have no control over.”

Mr Billing said the proposal to the Australian Energy Regulator was not an ambit claim and Evoenergy could not absorb the difference.

He said Evo understood customers’ frustration at the price increases, and it would support vulnerable users such as pensioners as much as possible.

It had flagged the possible impact of the falling spot price to the government last year.

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Minister for Energy Shane Rattenbury said the COVID-19-induced recession had also played a role in the falling spot price which had led to a more than tripling in the cost of the renewable energy scheme from around $42 million per year to $127 million this year.

“Because of our ‘contract for difference’ arrangement, where we guarantee the renewable energy generators a fixed price for the electricity they generate, this leads to an increase in the price of meeting our 100 per cent target,” he said.

“When wholesale prices are higher than this amount, we save money, and when they are lower than this price, we pay the difference between the two, which is passed through in electricity bills.”

Mr Rattenbury said the exact price increases would not be known until May when the Australian Energy Regulator assesses Evoenergy’s proposal, but he believed they would be less than the predicted $5 a week.

“The current estimate is that the cost for the typical household will increase from $1.94 per week to $5.65 per week, an increase of around $3.70 per week or $192 per year,” he said.

“This is still largely in line with the original projections of the total scheme cost, which was $5.50 per household per week.”

Mr Rattenbury said the ACT had benefited from lower electricity prices for years due to contracted renewable electricity supply being cheaper than wholesale electricity prices.

“The cost of the ACT’s Feed-in tariff scheme has been well below forecast levels for several years, which has resulted in lower household electricity costs than would have otherwise occurred, returning savings through lower electricity bills,” he said.

Mr Rattenbury said the ACT would remain comparable with other jurisdictions, even when the anticipated cost increase is taken into account.

He said assistance was available to vulnerable users, such as the utilities concession of $700 per year for pensioners.

“We will continue to work with Evoenergy to keep the cost of electricity as low as possible,” he said.

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But the Canberra Liberals have called the looming bill hikes another broken promise from the government.

“Last year, the Chief Minister and the leader of the Greens promised Canberrans that they would see cheaper electricity costs on their bills due to the ACT Government’s investment in renewable energy,” said Ms Lee.

“The Labor-Greens Government said Canberrans would see a decrease of about $43 on the annual electricity bill of the average ACT household for 2020-21. We now find out prices will rise on average $5.50 a week – almost $300 per year.

“The government needs to be upfront and tell Canberrans what they will do to keep power bills affordable.”

For those needing help, further information is available on the ACT Government’s Assistance website.

To inquire about a cheaper energy plan, go to www.energymadeeasy.gov.au.

* It was originally reported that residential bills would rise overall by 36 per cent but Evoenergy has clarified that this percentage only refers to the network charges, as does the figures for commercial customers.

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58 Responses to Power bills to soar as renewable energy scheme cost triples
Boweavil Kat Boweavil Kat 3:30 am 10 Apr 21

Not sure how you interpret lower costs to generate energy to renewable energy cost triples. The cost of energy hasn’t tripled is has reduced. it’s the company that wants to jack up the price so they can “generate” more profit.

Jeff Smith Jeff Smith 9:58 am 08 Apr 21

Is anyone surprised that our Electricity prices go up when the ACT Government recently signed a 20 year deal with SolarShare to buy electricity for Canberra at 19.56 cents per kilowatt hour, when other States sign up 8 cents kwh deals and the current South Australian Wholesale electricity price is 3.5c per kwh.

    Lindsay McClure Lindsay McClure 10:41 am 08 Apr 21

    Jeff Smith. I guess you can only blame the voters. The ACT Govt was voted in by a solid Labor vote. They are getting the results of who they voted for.by giving them a clear mandate. The ACT govt is a joke. All the encumbered members could Iive in the one street. There are no 'ridings' so representation is skewed terribly. Until this changes Canberrans will not be equitably represented. Likewise the number of people who actually live in ACT but vote in NSW is amazing. Go figure!

Denise Bourke Denise Bourke 10:41 pm 07 Apr 21

how do the energy coy keep a straight face when explaining their deal .... thanks for the gov who leads the way!! ...give it 5 years and there will be more renewables options ... Rule: 1 don't deal w monopolies.

Katy Did Katy Did 7:34 pm 07 Apr 21

One giant con Ray

Mark Chapman Mark Chapman 1:29 pm 07 Apr 21

This, folks, is why private enterprise should never be allowed anywhere near essential services.

    Denise Bourke Denise Bourke 10:42 pm 07 Apr 21

    Mark Chapman yep govs are too greedy for praise n power to do deals behind closed doors

Sean Bishop Sean Bishop 10:56 pm 06 Apr 21

Sounds like Canberra can get together with a protest we'd all agree on..

Dan Myles Dan Myles 10:00 pm 06 Apr 21

Nationalise all essential services then, get rid of privatisation it's a scam.

Tom Adam Tom Adam 8:52 pm 06 Apr 21

Not surprised, we pay pay pay under this government. And not for better outcomes.

    Justin Watson Justin Watson 10:17 pm 06 Apr 21

    Tom Adam Really, cause theres not too many other cities in Australia I'd rather live in. I mean whinge all you like, but you are benefitting from low unemployment and high average wages here in Canberra. That usually means we have to pay a bit more, but overall we are so much better off than most places in the world. I mean highest disposable income in Australia also means after we've paid all the nasty bills we still have more money left over than everyone else.

Lyndsay Ian Lyndsay Ian 7:53 pm 06 Apr 21

So the Act Govt is pushing us to take on more and more high usage electrical appliances because it is now a renewable resource, ie wind, solar, hydro.

Eventually gas wont be an option and the only option we will have will be electricity.so heating, cooling, cooking, hot water will have to be electricity.

Take a guess whats gonna happen, prices will skyrocket because the electricity companies will have us by the balls.

They are already talking about charging a tax for those who already have solar, so now they want to penalise people for contributing to produce their own electricity.

Seriously , it is rigged.

Only option is go solar, get batteries and go off the grid.

Kyle Roberts Kyle Roberts 7:41 pm 06 Apr 21

So basically Evo Energy "have no choice" but up make up the difference in their promised profits via contract with their inability to see renewables being cheaper than they'd otherwise expected when the contracts were originally negotiated, at least that's how the article reads...

    Tim Elliott Tim Elliott 8:33 pm 06 Apr 21

    Kyle Roberts, no that isn't the case. The ACT government have guaranteed the renewable generators a certain amount of revenue. Now that the price is low, we need to top up their earnings to meet that amount. Hence our bills go up.

    If the wholesale price increases above the contracted amount, they have to pay us the difference because they make more money and we save on bills.

    Kyle Roberts Kyle Roberts 8:35 pm 06 Apr 21

    Tim Elliott That's what I said but different wording...

    Katy Did Katy Did 8:49 pm 06 Apr 21

    Tim Elliott So when can we expect money back then? It is a giant con

    Tim Elliott Tim Elliott 9:15 pm 06 Apr 21

    Katy Did, we've actually been paying lower prices for the last few years because of it, although strangely no one was complaining then.

    Whether it's a good deal is debatable, but at least people need to understand why it has actually occurred. Looking at the comments, it seems not many people do.

    Sean Bishop Sean Bishop 10:56 pm 06 Apr 21

    Nailed it

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