Homes and businesses will start to feel some relief from soaring electricity bills within months, as authorities move to cut prices for hundreds of thousands of customers on the eastern seaboard by as much as 10 per cent for the first time in two years.
In welcome news for households battling mounting cost-of-living stresses, the Australian Energy Regulator on Tuesday released its draft decision on changes to the nation’s main consumer price caps, known as “default market offers”, to kick in from July 1, determining it would not hike prices in most regions for the coming financial year.
Two years of sharp increases in power bills across Australia have intensified cost-of-living pressures.Credit: Joe Armao
Instead, it intends to reduce most default offers – the maximum that retailers can charge customers on standard retail plans – by between 0.9 per cent and 9.7 per cent, cutting up to $487 a year.
From July 1, default offers will fall by between 1.9 per cent and 3 per cent in Sydney, and 2.5 per cent in South Australia, the regulator said. Offers would increase slightly by 0.9 per cent, or $22 a year, for customers in regional NSW, and by 2.7 per cent, or $53, in south-east Queensland.
In Victoria, the state’s Essential Services Commission, which determines its own default offer, is expected to release its decision later this morning.
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It comes as energy prices loom as a key battleground between the government and Coalition ahead of the next election as Labor faces pressure over a promise made before coming to office that its policies to support the build-out of cheaper-to-run renewable energy would lower consumers’ power bills by an average of $275 by 2025.
Changes to this year’s regulated prices will directly affect hundreds of thousands of consumers who do not take up special deals, but will also act as a reference point for electricity retailers, such as AGL, Origin and EnergyAustralia, as they assess their next pricing cycles across their wider customer bases.
Australian Energy Regulator chair Clare Savage said the draft determination had placed “increased weight” on protecting consumers amid a challenging economic environment.