Households across Australia’s east coast are set to receive some welcome relief this winter, with electricity prices falling in most states from July 1 under the Australian Energy Regulator’s latest Default Market Offer.
Millions of households in NSW and South East Queensland will see annual savings on their power bills, while small businesses are in line for even bigger cuts as wholesale electricity costs ease and renewable energy generation increases.
The Australian Energy Regulator (AER) announced on Tuesday that flat-rate residential customers in NSW will save between 3.4 per cent ($66) and 5 per cent ($137) annually, while households in South East Queensland will save an average of 7.2 per cent, or about $155 a year.
South Australians, however, will miss out on the reductions, with flat-rate household bills expected to rise by 1.4 per cent, adding around $33 annually.
For customers on time-of-use plans with smart meters, prices will fall across all three regions covered by the Default Market Offer.
Canstar data insights director Sally Tindall described the changes as a major boost for struggling families.
“It is a huge relief to see the regulator shift electricity prices in reverse in NSW and South East Queensland,” she said. “South Australians, however, haven’t been as lucky this time around, with default prices to rise by 1.3 per cent from 1 July for those on a flat-rate plan – a bitter pill to swallow as the state grapples with noticeably higher wholesale electricity prices.”
Small businesses stand to gain the most from the new pricing, particularly in NSW where annual bills will fall by 11.3 per cent – a saving of roughly $705.
Businesses in South East Queensland will save about 10.4 per cent ($445), while South Australian businesses will pay 6.8 per cent ($379) less.
The biggest reductions apply to time-of-use business customers, with NSW businesses saving up to 20.9 per cent, or around $1303 annually.
The changes largely mirror Victoria’s Default Market Offer announced earlier this week, which forecast household electricity bills dropping by about 5 per cent.
AER chair Clare Savage said the lower prices reflected easing pressure in the wholesale electricity market.
“The reductions compared to last year reflect easing costs across most components of the DMO, particularly in wholesale energy, where we’ve seen lower electricity contract prices, reduced spot price volatility, and increased output from wind and battery generation during evening peaks,” she said. “Despite uncertainty created by conflict in the Middle East, wholesale energy costs have not increased.”
Federal Energy Minister Chris Bowen said the savings showed the government’s renewable energy strategy was beginning to deliver results.
“Our plan has two parts: more cheaper, cleaner energy and a better deal for households – and that’s what we’re delivering with the latest regulator’s benchmark for energy bills showing declines across households and businesses,” he said.
“We’ve got the best sun and wind in the world, and we’re using our sovereign renewables to shield our grid from global energy volatility and to bring down your energy bills.”
Despite the cuts, experts are warning Australians not to assume they are already on the cheapest possible plan.
iSelect energy expert Sophie Ryan urged households to compare offers and avoid a “set and forget” approach to their electricity provider.
“The DMO may not be the best-priced energy plan in the market. I would urge electricity customers to use today’s news to shop around for a better energy deal,” she said.
“New iSelect research found 38 per cent of Aussies say they have either never switched their energy plan and/or provider or haven’t in over five years.
“That ‘set and forget’ attitude could be costing Aussies dearly, so use this annual reset as your reminder to review your plan.”
The announcement also included details of a new opt-in “Solar Sharer Offer”, designed to encourage households to use electricity during peak solar generation periods.
Under the plan, households would receive three hours of free electricity during the middle of the day – between 11am and 2pm in NSW and South East Queensland, and noon to 3pm in South Australia.
The offer is aimed at encouraging consumers to shift energy-intensive activities such as charging electric vehicles, using air conditioners or running appliances into daylight hours when solar generation is highest.
However, households would pay slightly higher rates outside the free-power window, with electricity costs rising by between 1c and 4c per kilowatt hour during the remaining 21 hours of the day.
Ms Savage said the plan could help households further reduce bills if they were able to adjust their electricity use.
“With the Solar Sharer Offer now part of the DMO, there’s the added safety of it being a regulated price, which means consumers can feel confident they are not being overcharged outside the free power period,” she said.
While welcoming the reductions, welfare advocacy group Australian Council of Social Service said more support was still needed for vulnerable Australians struggling with rising living costs.
Acting chief executive Edwina MacDonald said many households were still being forced to make “impossible sacrifices” to afford basic energy use.
“Lower electricity prices from July will be a welcome relief for people who have been making impossible sacrifices just to keep the lights on,” she said.
“The faster we lift people out of poverty and accelerate the transition to clean renewable energy, the fairer, more resilient and more sustainable our country will be.”
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