Believe it or not: ACCC finds electricity prices falling

The Australian Competition and Consumer Commission finds electricity reforms working.

falling costs concept with colorful piggy bank

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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    COMMENTS

    To make a comment, please register or login
    Buggsie
    19th Oct 2020
    4:50pm
    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?
    Aussiefrog
    19th Oct 2020
    5:05pm
    That's a pretty good deal!
    ex PS
    19th Oct 2020
    5:21pm
    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.
    sunnyOz
    19th Oct 2020
    10:45pm
    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.
    Farside
    20th Oct 2020
    4:22pm
    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
    panos
    20th Oct 2020
    5:00pm
    Farside tell me the name of your plan.....I gather your distributor is Ausnet ???
    Anonymous
    20th Oct 2020
    5:49pm
    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.
    Anonymous
    20th Oct 2020
    5:50pm
    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.
    Farside
    20th Oct 2020
    9:18pm
    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.
    Stone the Crows
    19th Oct 2020
    5:06pm
    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
    The Thinker
    20th Oct 2020
    10:38am
    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.
    Tood
    20th Oct 2020
    2:10pm
    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
    sainter
    21st Oct 2020
    11:07am
    This government have a slogan for everything....no surprise they have one for energy prices.Sick of listening to these slogans each and every day.
    sainter
    21st Oct 2020
    11:07am
    This government have a slogan for everything....no surprise they have one for energy prices.Sick of listening to these slogans each and every day.
    Cheezil61
    19th Oct 2020
    5:08pm
    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
    Jane
    19th Oct 2020
    5:08pm
    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.
    tisme
    19th Oct 2020
    5:09pm
    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
    Life experience
    19th Oct 2020
    5:18pm
    NO HELP TO WA.
    We can’t shop around.
    We only have one supplier in Perth.
    How and when do we benefit ?
    British Bulldog
    19th Oct 2020
    5:24pm
    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.
    Arvo
    19th Oct 2020
    5:33pm
    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 !!!
    ollie
    19th Oct 2020
    5:37pm
    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
    mitch
    19th Oct 2020
    6:12pm
    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
    Cheezil61
    19th Oct 2020
    8:50pm
    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!
    Tood
    20th Oct 2020
    2:12pm
    In SA with Origin the kw rate sent down about 2c, big deal!!! planning my next world trip on the windfall!!
    panos
    19th Oct 2020
    6:21pm
    with the suggestion that customers could save up to $219 a year by shopping around.

    FANTASY--- I am sick of these LIES
    panos
    19th Oct 2020
    6:29pm
    so cheap for Victorians...WHAAAATTTT

    Compulsory with distributor Ausnet to be on TOU 7am to 11pm 34.12 cents a kwh 11pm to 7am 19.2 cents kwh weekends 19.2 cents kwh. AGL supplier
    daily charge 98.00 cents a day feed in solar 10 cents a kwh...
    sunnyOz
    19th Oct 2020
    10:49pm
    Agree it is fantasy - and where do they get this figure of $219? Is that off a bill of $500 a year, $1500 a year, or $15,000 a year?
    Garyand
    19th Oct 2020
    7:40pm
    All rates reduced in Tas by 1.38%, so it is working. Mind you, our electricty assets are state owned and never sold!
    concerned senior
    19th Oct 2020
    8:07pm
    My electricity account went up by about 3% on my peak rate and over 47% (yes 47%) on my offpeak rate. I had to chase up my supplier (and others) and then resort to contacting my state Obdusman who helped a little and rattled the can. I changed to a flexi rate style of account - never knew such a thing existed. It is hard work trying to sort out between all the offers. You need to have a good knowledge of electrical units and of mathematics and get into spreadsheets to work out the best of the offers. Don't give up.
    Cheezil61
    19th Oct 2020
    8:55pm
    It really shouldn't be so hard, but I guess that's how they rip us off...Oops I mean make their money!
    maelcolium
    19th Oct 2020
    8:52pm
    Amazing prices I've seen in here. I'm with AGL fixed for three years Peak .33, Off peak .156 plus GST ............... FIT .142 but wait for it ..........daily supply charge .7371 .... you need to look at your own circumstances as our 7.4kWh solar means our bills on those tariffs are almost non existent. Think I paid less than $200 in 12 months.
    panos
    20th Oct 2020
    5:02pm
    you must say your state please.
    Arvo
    22nd Oct 2020
    3:57pm
    Yeah? What about how much it cost you in total for your Solar installation and meter equipment. How many years before you break even on your solar investment? Easy to talk how much less one pays with solar...not a word how long before you break even before the saving rolls in.
    Garyand
    19th Oct 2020
    9:54pm
    Dropped by 1.38% in Tasmania. Whilst very little competition in Tasmania, Tasmanian actually owns most of the generators and the poles and wires! This, usually, sees a dividend paid to the state government each year and hence keeps fees relatively low on a national stage, as well as lung teachers and health workers, etc.- a big ask when we buy a lot of energy to keep warm in winter :),
    sunnyOz
    19th Oct 2020
    10:53pm
    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.
    What I find the most galling is not so much the electricity rates - but all the fees and charges. I keep a detailed summary of my bills, and over the past 5 years (all with same supplier), my fees and charges have increased 127%.
    Anonymous
    20th Oct 2020
    5:38pm
    51c buyback???? That doesn't sound right, sunnyOz, unless you've got a contract that started a long time ago. I did extensive research and 10c was the best I could get. I could have got a bit more if I had a smaller solar system, but 16c would definitely be the top rate. Should that maybe be 5.1c? That would make more sense, as I don't think any company would pay double their charge rate.

    I am with Red Energy and getting a credit each quarter despite having quite high usage because we don't have town water so have to use pumps for water and septic. Recently installed a very small pool. Will be interested to see how that impacts the bill.
    Anonymous
    20th Oct 2020
    5:39pm
    I might add Red have just jacked their prices up 10%, but still seem to be lower than Origin.
    BillW41
    20th Oct 2020
    12:13am
    My last Simply Energy electricity account (June-Sept) gross was $1,193.77 and after 32% discount, after adjustments, was $823.94. Previous three months gross was $484.25, net $341.17. Basic Unit price 0f 0.4186 hasn't changed for a year. Gas discount is 10% if paid on time and basic Unit price of 0.0516 also hasn't changed. Don't have solar, but get pensioner rebate.
    British Bulldog
    20th Oct 2020
    11:39am
    Try Tango Energy for a better deal Bill.
    Tood
    20th Oct 2020
    2:34pm
    Which state are you in Bill?
    floss
    20th Oct 2020
    12:30pm
    Rubbish under this governments model prices can't reduce.I no longer believe any thing this government put out ,it is just a great big con.
    BillW41
    20th Oct 2020
    1:44pm
    Tango doesn't operate in SA.
    diamond
    20th Oct 2020
    2:31pm
    Bill .That is the problem with the discussion, A lot of us do not have as much choice in providers as others do.
    JoJozep
    21st Oct 2020
    12:08pm
    What bullshit is the ACCC trying to spin? Prices in Victoria (Alinta Energy) have not decreased, instead the bastards have simply been allowed to drop their rebates for solar FID from 12.00 to 10.60 cents/Kw Hour. My solar is only a few months old, and I still owe $1888 loan to Vic Gov. That's an 11.66% reduction/increase out of pocket charge, whether you pay or lose doesn't matter, it's still your money down the drain.

    I generate more power than I use, but because of all the fixed charges and higher usage costs, I pay three times what I get back. So what government bullshit is the ACCC on about. Have they been told by that lying, grinning LNP ScoMo to fudge the figures? I wouldn't be surprised. So F*** the system, greedily manipulated by those money hungry capitalist profit-profit-profit motivated bastards! That's what the LNP arseholes have allowed to happen. Who sold the SEC in Victoria to private companies? You guessed right that hopeless twit and liberal premier Jeff Kennet telling us we have now got the budget back on track.

    Liars and deceivers. Selling off our assets is an easy fix, but we, the people who work and grow the economy will pay through the nose till we die. Hit the common person unable to fight back!

    I keep saying, wake up and get onto your member of parliament and tell him/her to get off their bum and take action. The ACCC in my view is the poorest dumbest organization I have ever come across. (Look at petrol prices under their watch). They should be sacked, and a new "independent" body established, not government and capitalist cronies.
    Farside
    21st Oct 2020
    7:32pm
    you might find Rod Sims talk to the Press Club earlier today interesting (https://iview.abc.net.au/video/NC2011C039S00). Price increases due to market failure and unfair trading are not in the purview of the ACCC. Sims specifically spoke of gouging by power companies after ACCC being overruled by courts on market power concerns.
    BraveArrow
    21st Oct 2020
    4:19pm
    The whole electricity/energy (retail) market is a screw-up!
    Somebody is making money whilst the ordinary people (consumers) are being ripped off to the point of, may I say, dying. I have had first hand experience where is SA on superhot days which run into weeks and older people who have no air-conditioning and/or cannot afford to pay their (high) electricity bills actually die.
    All for the sake of privatisation, renewables, carbon-tax, greenhouse gas, etc.
    It's all a spin by the government and their consultants, the so called regulatory authorities, and the big energy providers.
    Australia is blessed with ample energy resources, e.g. thermal coal and gas and yet we suffer one of the highest energy prices in the world (don't believe the reports generated by the vested parties- they are skewed to hide the obvious and they do a good job!).
    Over the years since privatisation, I have followed the energy market (in Australia) and everytime the govt. or the Greens talk, the prices go up. To make a fair comparison, Australia should compare (energy prices) with large countries like (continental) US and Canada; when you look at the numbers you will realise that we (ordinary consumers) are being ripped off and subsidizing the rich here, the latter being able to afford (the capital cost) solar and getting ridiculous feed in tariffs rates.
    May I say that I am a professional electrical engineer (now retired) involved in power generation in both Australia and Asia and I have seen the successful evolution and growth of energy provision by independent power producers, large peaking plants, gas extraction and utilsation in home countries - resulting in affordable energy to the (ordinary) people.
    Farside
    21st Oct 2020
    7:37pm
    One of the problems resulting the concentration of ownership in the energy market is that pricing can be gamed by restricting supply. This happens in SA with suppliers not bringing gas-fired generators online to keep the market price high and there is little AEMO can do about it.


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