The federal government is partnering with the states and territories to implement the Energy Price Relief Plan (EPRP). But what will it actually mean for your power bills?
Against a backdrop of soaring energy prices, Prime Minister Anthony Albanese has announced a plan to ease the pressure on household gas and electricity bills.
The EPRP is intended to “shield Australian families and businesses from the worst impacts of predicted energy price spikes”, the PM said in a statement.
The plan has four key objectives:
- to introduce a limit on domestic gas prices
- to introduce a limit on domestic coal prices
- to provide targeted energy bill relief for households and businesses
- to invest in building cleaner, cheaper, more reliable energy for the future.
Read: Energy prices are driving inflation, CPI shows
While the last item may help in years to come, it’s the first three aims of the EPRP that will have the biggest impact on your bills in the here and now.
The PM says the plan will leave the average Australian $230 better off next year.
“The plan is responsible, targeted and temporary,” Mr Albanese said.
“It is designed to provide all Australians with a buffer in unprecedented times.”
Cap on gas prices
Wholesale gas prices will be set at $12 per gigajoule for east coast gas producers and a mandatory code of conduct that includes a “reasonable pricing” provision will be introduced.
The wholesale price forms a major part of the end price you pay for your gas. Earlier this year, the domestic wholesale price hit $40 per gigajoule, so capping this price at $12 should see your gas bill come down.
Read: Aussie energy prices are ‘unreasonably high’
As gas is also sometimes used for backup electricity generation, the wholesale price of gas can have an impact on your electricity bill too, so the cap should stop your electricity bills going up at the very least.
Cap on coal prices
Australia’s two major coal-producing states, Queensland and NSW, have separately agreed to cap the price of coal used for electricity generation at $125 per tonne.
Electricity prices are forecast to jump 36 per cent next year, and Treasury says the coal price cap should reduce this increase by around 13 percentage points.
Targeted Energy Bill Assistance
In perhaps the most immediately practical measure in the EPRP, the federal government will again partner with the states to deliver $1.5 billion in “targeted and temporary relief on power bills” to eligible households.
Read: Energy giant warns power prices could increase by 35 per cent
Commonwealth support will be contingent on the relevant state or territory matching funding on a dollar-for-dollar basis.
Details on this part of the scheme are scarce at this stage, but eligible households will include those receiving income support such as the Age Pension and to Commonwealth Seniors Health Card holders.
Any relief will be credited directly to your gas or electricity bill.
The PM says he expects the final details and funding arrangements will be settled by national cabinet by March 2023.
Do you think this plan will result in lower power bills? Will you qualify for any targeted relief? Let us know in the comments section below.