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Annual household electricity bill to drop $43 on average

The average Canberra household can expect a $43 cut to their annual electricity bill in 2020-21, following the ACT Independent Competition and Regulation Commission (ICRC) decision on regulated retail electricity prices released today.

In a media statement, ICRC Senior Commissioner Joe Dimasi said “the final decision means that a typical customer on ActewAGL’s standing offer contracts will see a 2.56% reduction in retail electricity prices in 2020-21.” This is equivalent to a decline in real terms (adjusting for inflation) of 4.31%.

“For the average residential household consuming about 6,500 kWh per year, the expected price decrease would translate to a reduction of $43 in their annual bill,” Mr Dimasi said.

“The impact on non-residential customers ranges from a reduction of $265 per year for a large customer to $66 for a small customer.”

The ICRC said the average retail price decrease largely reflects falling prices in the wholesale electricity market. A key driver of these lower wholesale prices is the growth in renewable energy generation. This led to a reduction in wholesale energy purchase costs and national green scheme costs.

The final report of the ICRC’s retail electricity price investigation 2020-24 also made two recommendations to make it easier for consumers to shop around for a better electricity plan. It recommends that the ACT Government:

  • develop a reference bill amount which consumers can use as a common point of comparison for assessing electricity offers; and
  • require retailers to regularly notify their customers if they have a better offer and ask customers to call them for information and assistance with switching.

ACT Council of Social Service (ACTCOSS) CEO, Dr Emma Campbell, said “ACTCOSS welcomes the ICRC’s recommendations and we commend the Chief Minister for directing the ICRC to explore ways to improve the transparency and comparability of electricity offers as part of its investigation.

“We now encourage the ACT Government to act as quickly as possible to implement the ICRC’s recommendations so that Canberrans can move to more affordable energy offers more easily.

“We commend the ICRC for the efforts it took to understand the challenges faced by ACT energy consumers in choosing from the different offers available from various energy retailers.

“A survey undertaken by the ICRC found that over two-thirds of Canberrans have difficulty comparing electricity plans due to there being too many different terms and conditions, and a lack of clarity as to how discounts are calculated. It found that less than one-fifth of Canberrans are ‘confident’ that their current electricity plan is best for their circumstances,” Dr Campbell said.

“Electricity is an essential service and people should not have to wade through complex and confusing information to access more affordable energy. The ICRC’s final report indicates that there will be little price relief for Canberrans over the next year after a decade of significant electricity price increases. The measures recommended by the ICRC would provide a way to access some price relief by supporting customers to change to a better offer and/or retailer,” she said.

According to Dr Campbell, the introduction of ‘better offer notifications’ in the ACT would reduce the burden on consumers and place more accountability on retailers, requiring them to advise their customers if they would save money by moving to one of their other offers. The introduction of a ‘reference bill amount’ will make it easier to compare electricity offers from different retailers.

“There are some supports already in place and ACTCOSS strongly encourages people to visit the Australian Government’s Energy Made Easy website now to find the best electricity and/or gas offers across all ACT energy retailers,” she said.

Dr Campbell said ACTCOSS expected that a greater number of Canberrans will struggle to pay their winter energy bills this year due to the impacts of the COVID-19 pandemic, including loss of income and bigger bills due to spending more time at home.

“While far from a panacea, helping people make sure they are not paying more for their energy than they need to would assist in reducing this impact,” she said.

“These are simple measures that will have a positive impact, especially for people living in low-income households. We urge the ACT Government to move quickly to implement the measures recommended by the ICRC for the benefit of all Canberrans during a particularly challenging time.”

The final report is available on the ICRC website.

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