How much households and small businesses will save next financial year
More than half a million Victorian households will see their electricity prices fall by an average of $84 next financial year, while small business owners will save an average of $241.
Victoria’s energy price regulator, the Essential Services Commission, has announced its default offer will be reduced by an average of 5 per cent for residential properties and 6 per cent for small businesses in the next financial year.
Approximately 512,000 households and 62,000 small businesses benefit from the state’s default electricity pricing proposal. The regulator is setting the default offer to provide a basic energy plan to 182,000 customers living in flats and caravan parks who cannot choose their energy supplier, as well as those who do not want to engage with energy retailers.
Price discount will vary by energy retailer. AusNet customers in eastern Victoria will see savings of $160 in the next financial year, while those buying electricity from Citipower and Powercor in the state’s west will save $65 to $70.
ESC commissioner and chair Gerard Brody said the state’s default electricity prices were set independently of energy retailers to give Victorians “access to a fair deal”.
“Lower electricity prices will be welcome news for Victorian households and small business owners who continue to face cost of living pressure,” he said.
The commission said in its final decision document that the reduced default proposal was due to reduced environmental, network and wholesale electricity costs in the next fiscal year.
Disruptions to global fuel supplies, including those caused by the Iran war, had “mixed but generally mild impacts” on the cost of future electricity contracts, the commission said.
Victoria’s assumed electricity price drop contrasts with projected cost increases for other eastern states.
The Australian Energy Regulator, which sets default market bids for NSW, South Australia and south-east Queensland, said in its draft decision in March that house prices would rise between 2.5 and 8.9 per cent depending on the region.
The final decision on the default proposal will be published by the AER on Tuesday.
Victorian Energy Minister Lily D’Ambrosio said the government was investing in renewable energy to make “life cheaper” in the state.
The ESC’s draft document in March initially envisaged a more modest reduction in domestic bills of $46 per year.
In a submission to the draft document, the Energy Council of Australia said the cost reduction would not be indicative of a “structurally lower cost environment” across the state.
The AEC said grid costs continue to rise and account for the lion’s share of electricity costs, while national wholesale electricity prices are still subject to fluctuation.
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