Taking the pressure off electricity prices
From 1 July electricity customers in NSW should see their prices fall between $106 and $313 on average, depending on where you live, following a decision by
the Australian Energy Regulator (AER)
In cautiously welcoming the regulator's decision on prices, CHOICE spokesperson Tom Godfrey said: "Anything that stands to take the pressure off electricity
prices in NSW will be welcome news for consumers."
Top cost-of-living concern
The latest Consumer Pulse research from CHOICE found electricity was again the number one cost-of-living concern for consumers in Australia, with the
survey finding that 78% of consumers are struggling with electricity costs.
"It's time energy retailers played their part in taking the pressure off family budgets," says Godfrey.
Household energy bills are comprised of network costs, which are set by the regulator every five years, and generation and retail costs which are
deregulated and set by the market.
With network charges contributing around 50% to a household power bill, if energy retailers do the right thing by consumers then today's decision should
result in lower electricity costs.
However, the Public Interest Advocacy Centre notes that the regulator could have made further reductions in the amount distributors are to receive, with
them stating: "While the AER's decision will lead to a reduction in electricity prices for consumers, they will still be significantly higher than they need to be. This
is because the AER has allowed increases in both capital expenditure and operating expenditure above its draft determination."
Network prices in NSW are now double those of Victoria. In other words, it costs twice as much to get electricity from a power station in NSW to a
household, as compared with Victoria."
Clearly more can be done to reduce electricity costs.
Turning the heat up
Following the announcement, CHOICE is calling on the major electricity retailers to pass on the savings to consumers to alleviate pressure on household
"If the energy retailers do the right thing then consumers should see a price reduction, and CHOICE will be watching," says Godfrey.
CHOICE would also like to see further changes to the rules that govern the energy market and have recently supported a push to incentivise demand-side
management options, where it will reduce network costs, as this will lead to lower network costs and electricity costs for customers.