Power price reductions are here

Your next utilities bill may cost you slightly less, after Australian energy providers put lower rates in place as of 1 July.

But as welcomed as lower power prices may be, the Grattan Institute is warning Australians that high electricity prices are here to stay and is calling on the Government to stop pulling the wool over Australians’ eyes and admit the depressing future of energy costs.

According to a Grattan report released yesterday, wholesale electricity prices have risen by 130 per cent between 2015 and 2017, with household bills increasing by up to 20 per cent in 2017 alone.

The report says that it is impossible to fix the problem, because the price rises have occurred due to issues beyond the Government’s control, such as the cost of running old coal-powered stations, the rising price of gas and coal, and that electricity companies are ‘gaming’ the system by using “their power in concentrated markets to create artificial scarcity of supply and so force prices up”.

Right now, the rate cuts are being hailed as ‘relief’, although they won’t provide much succour from the hip-pocket pain of 20 per cent hikes last year.

However, any relief will be welcomed by age pensioners who are struggling to keep up with power bills, many of whom choose not to switch on a heater for fear that they won’t be able to afford to pay their bill.

While many will be happy with a slightly lower bill, not everyone will benefit. Origin customers in NSW and ACT will see no change to their electricity bill. Origin’s prices in southeast Queensland will drop by 1.3 per cent, while South Australia will see a one per cent drop. Origin gas bills in NSW will drop by three per cent in NSW and stay the same everywhere else.

AGL customers will have their residential rates reduced by 0.3 per cent in NSW, 1.6 per cent in Queensland and 0.4 per cent in South Australia. However, AGL gas prices will increase by 1.8 per cent in NSW and 2.1 per cent in South Australia but will stay the same in Queensland.

EnergyAustralia’s Queensland customers will benefit from a big 3.8 per cent residential electricity rate cut and a 7.2 per cent decrease for small business customers.

In NSW, EnergyAustralia electricity prices will drop by 0.2 per cent for residents, while gas prices will be unchanged. Both gas and electricity prices will remain flat for customers in South Australia.

Residents of states who don’t receive direct rate cuts may still shave hundreds off their power by enrolling in new direct debit savings programs. Some power companies are offering savings of up to 28 per cent for resident who approve direct debit payments.

With many power companies offering slight discounts on rates, others are staying put. To find the cheapest electricity prices in your state, visit CHOICE.

While power prices may drop ever-so-slightly this year, the Grattan Institute says we will never see a large enough drop in wholesale electricity prices to ensure the lower prices we have been used to paying in the past.

“Politicians should tell Australians the harsh truth: high wholesale electricity prices are the new normal,” states the report.

Will you welcome a slightly lower power bill?

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