Believe it or not: ACCC finds electricity prices falling

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Last week, we reported on the massive power bills households have been receiving with people spending more time at home during the pandemic, but apparently electricity prices have been falling.

That’s according to the Australian Competition and Consumer Commission (ACCC), which released its electricity markets report on Monday with the suggestion that customers could save up to $219 a year by shopping around.

According to the ACCC report, electricity prices paid by many residential customers in NSW, South Australia, south east Queensland and Victoria fell between 2018 and 2019.

Those figures are based on an analysis of extensive data from more than 8.5 million electricity bills.

ACCC chair Rod Sims said the data from the bills of more than 1.5 million customers of 11 electricity retailers showed that there were now more customers on market offers and fewer on the usually more expensive default standing offers.

“While it is still early days, the analysis of this large unique dataset indicates that electricity pricing and advertising reforms introduced in July last year have been effective in protecting customers on standing offers from excessive pricing and bringing down electricity bills,” Mr Sims said.

Impact of COVID
As we reported on Friday, there has been a spike in power usage resulting from more people spending more time at home, and the ACCC has also released an additional report examining the impact of COVID-19 on affordability and consumption.

“The supplementary report shows that overall electricity consumption fell by 2 per cent in the second quarter of 2020, compared to the same time last year. Residential consumption rose significantly during the nationwide COVID-19 lockdowns, and because of colder weather in some states, while business consumption plummeted,” Mr Sims said.

For example, Melbourne residential electricity consumption rose by between 10 and 30 per cent in April and May 2020, depending on the weather, compared to the same period in 2019.

“The pandemic is exacerbating energy affordability concerns. At a time when many consumers are experiencing reduced incomes, increased electricity consumption could lead to rising household debt and financial strain,” Mr Sims said.

“Available data suggests more customers are a month behind in bill payments and energy affordability may become an even bigger concern in coming months.”

Craig Memery from the Public Interest Advocacy Centre (PIAC) said many people were reporting bill increases in the hundreds of dollars.

“The nub of the problem is that people have been required to be at home, they’ve lost jobs, they’ve lost income,” he told the ABC.

“And at the same time, people are using a lot more energy.

“In March, we did some analysis and estimated that some people were going to have energy bill increases in the order of $200 a month, and we have seen that come to fruition since, particularly in the colder winter months.”

He said some people were taking extreme measures to ensure they could pay their bill.

“We see people going without essential energy use for heating, for cooling, for heating water so they can clean and shower,” Mr Memery said.

“We see people taking on payday loans and unsustainable loan options to allow them to pay their bills and they often come with exorbitantly high interest rates that place people in worse and worse debt.”

Lower prices
The electricity market report looked at combined data in NSW, South Australia, south-east Queensland and Victoria for the third quarter of 2019 compared to the same period in 2018.

It found that the median effective price paid by residential customers on standing offers fell by 4.4 per cent, whereas the median effective price paid by residential customers on market offers fell by 3.5 per cent (residential).

While concession and hardship customers are generally paying lower prices than other residential customers, those who are on payment plans due to financial difficulty are paying more than concession and hardship customers.

The electricity market report found that less than 60 per cent of payment plan customers on market offers with conditional discounts, such as paying on time, did not meet the conditions.

“There are still too many customers who do not achieve conditional discounts on these types of plans, which means they pay higher prices that can exacerbate existing financial difficulties,” Mr Sims said.

“We urge retailers to abide by best practice for their vulnerable customers and help them move to the most suitable electricity plans.”

Shopping around
The report found that the median effective price paid by customers on market offers was lower than that paid by customers on standing offers.

“Residential customers with a median annual electricity usage could save around $219 a year by switching from a standing offer to a market offer,” Mr Sims said.

Do you shop around for your electricity? Do you have a market offer or a standing default offer? Have you noticed cheaper electricity prices as a result of shopping around?

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Written by Ben

47 Comments

Total Comments: 47
  1. 0
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    I’m with Red Energy and I paid the same base rate in 2019 as 2020, 29 cents plus GST (31.9 c) per kWh. I get a 12% discount for pay on time. I have solar and get 11c per kWh for power to the grid. Is anyone on a better scheme?

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      That’s a pretty good deal!

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      I don’t know what we pay as I haven’t had a bill in over 8 years.
      ERGON gives us .44 cents a kWh on a contract that ends 2025. We get quarterly paymenrs of about $200.00 on average which goes into the bank to pay for a battery in 2025 when the contract runs out.
      Not too shabby for a 3 kWh system.
      We got in one day before the offer was recinded.

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      Yes Buggsie – I’m in Qld, with Origin. On 24.91 cents plus gst per KWh. I get a 16% discount, and I have solar (8 panels) with 51c buy-back. I have a pool, am retired so home allot, and my quarterly bill is never over $100.
      Perfectly happy and renegotiate it every year.

    • 0
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      In southern VIC with Tango – peak (700-2300 M-F) 29.458, offpeak 14.421, supply 108.9/day, FiT 11.300

      last 12 months bills around $300, previous 12 months around $73 with 5kw solar

    • 0
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      Farside tell me the name of your plan…..I gather your distributor is Ausnet ???

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      Also with Red in Qld, Buggsie. Just went up 10% to 22.44c per kwh + GST and 94c per day +GST supply charge. 16.1c solar rebate for first 5kwh per day, then 10c for any above that. Don’t know what the pay on time discount is because our solar feed-in has been high enough that we haven’t yet had a bill to pay.

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      BTW Buggsie – you might see an increase in the rate on your next bill. The 10% rise was advised only a few weeks ago. It wouldn’t have come thru on a bill yet.

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      distributor is Ausnet Panos. Plan is called Home eSelect and was taken out June 2018. The offer ID is TAN70824MR. Network tariff is NEE26. and those rates are inclusive of GST.

  2. 0
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    apart from early payment plan . and pensioner discount if you believe anything a politician says about lowering electricity prices ,you have rocks in your head .Its just a yearly election slogan

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      I have shopped online with the Vic Government Energy Comparison site every 12 months. My energy consumption was less but bills still higher because despite shopping for cheaper deals they go up anyway. I have noticed a lot of the energy providers expect direct debit and monthly bills only.

      Consumers are being ripped off by energy providers and the Government just gave the public the runaround while prices continue to increase every 12 months.

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      Quite right Thinker its still all smoke and mirrors, the rip off by private suppliers continues, comparison rates hardly worth it a waste of time to save $50 on a bill over $1000. Direct debit only proves that all they care about is being able to get hold of the money and with monthly bills, quickly get hold of it. The whole system is stuffed with a capital F. Government needs to take back oontrol of essential services and the useless bastards have no intention of doing that

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      This government have a slogan for everything….
      o surprise they have one for energy prices.Sick of listening to these slogans each and every day.

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      This government have a slogan for everything….
      o surprise they have one for energy prices.Sick of listening to these slogans each and every day.

  3. 0
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    Doubt this is getting passed on to consumers, my provider increased its charges by around 3c per kWh & supply by 8c per day & wouldn’t negotiate at all so I said goodbye.
    On doing the research most other providers were even dearer than the old one by quite a bit!
    New provider not much cheaper but every cent helps I guess. Just rogues

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    I’m with AGL (Queensland). I received my energy bill recently and the general usage price /kwHr has increased, now $0.255 up from $0.2537 and feed in Tarif (for solar) /kwHr has decreased, now $0.52 down from $0.526.I know it’s not much of a change but it’s the second price change this year.

  5. 0
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    i just got my electricity bill and got a real shock , im at home all the time nothing to do with the virus and the bill has gone up yet ive not used any more power

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    NO HELP TO WA.
    We can’t shop around.
    We only have one supplier in Perth.
    How and when do we benefit ?

  7. 0
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    We are with TANGO ENERGY..Peak 33 cents kWh..14.520 kWh inclusive of GST,no other discounts except Pensioner concession. Solar feed in 10.2 kWh. Was with RED for 12 years previously, should head back there for that deal Buggsie.

  8. 0
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    My provider charged $145 more than last year for May and June consumption of electricity. The only way to reduce the cost is to sacrifice and consume less electricity…which is f***ken hard to do down south during very cold winters. Got rid off using any heating appliance with more than 1,500 watt except the stove 3, 000 watt and the hot water tank but, this helped only to maintain the same average of consumption as last year and year before. So when I read about providers reducing charges I say…BS !!!

  9. 0
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    I shop around for the cheapest have solar panels and get 18c per KWh 12% discount pay on time with origin use less power than last year and pay more someone is having a lend of all of us

  10. 0
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    to ben hocking
    you do not do your homework very well because you should read some of the comments on electricity I for 1 have only received 1 decrease in power in 10 years although promised several times by the S.A.govt yet in Victoria the worst place for the virus are bragging they get power for less than $2/day how come it is so cheap for Victorians compared to the rest of AUSTRALIA TANGO ENERGY

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      I’m in Vic, was with Tango (see my other comment) & they were charging around 18c per kWh & 1.05 per day supply (I don’t av solar) but increased prices to 21c per kWh & 1.21 per day supply & tho I threatened to leave they refused to budge so am with 9saver Click Energy as of this month but they are one cent per kWh dearer but there supply charge is 1.06 – I agree with you on this article being bs – no one’s electricity charges are going down!

    • 0
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      In SA with Origin the kw rate sent down about 2c, big deal!!! planning my next world trip on the windfall!!

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