The Australian Energy Regulator said on Tuesday it will cut the maximum rates retailers can charge customers on default electricity plans from July 1, delivering lower power bills in most states and a modest increase in South Australia.
The biggest reductions will be in parts of New South Wales and Queensland. Default prices will fall by up to 5 per cent, or $137, in NSW, and by up to 7 per cent, or $155, in south-east Queensland. In South Australia, prices will rise 1.5 per cent. Victoria will see an average fall of 5 per cent, or $84 a year.
Small businesses are also set to benefit. NSW small business rates will fall by up to 11 per cent, or $705, in one category and 10.5 per cent, or $445, in another category named by the regulator. Victorian small businesses would save 6 per cent, or $241, a year.
The default offer figures show the level at which the cap will sit on average use, rather than a fixed bill. In Sydney and the Central Coast on the Ausgrid network, the default offer will be $1899. On Endeavour’s network in western Sydney, the Blue Mountains and the South Coast, it will be $2328. In regional NSW on the Essential Energy network, it will be $2604. In south-east Queensland on the Energex network, the default offer will be $1988. In South Australia, it will be $2334. Victoria’s average default offer will be $1591.
Clare Savage said the cuts were mostly the result of falling wholesale electricity costs. She said a huge influx of batteries into the grid had created a structural shift, with batteries now coming in at prices lower than gas. She also said the global energy shock caused by the Iran war had not lifted electricity prices this year. Domestic gas and electricity markets have remained stable so far, even as attacks on energy infrastructure in the Middle East and the blockade of the Strait of Hormuz have roiled global energy markets.
Savage said there was still risk if the conflict dragged on. “For however long or prolonged this conflict might be, that’s where we think there could be risk,” she said. She also said it remained to be seen what would happen in the 2027-28 financial year.
Energy Minister Chris Bowen said the falling prices showed the government’s plan to replace ageing coal plants with renewables was working. The latest cuts mark a sharp contrast with 2022, when Russia’s invasion of Ukraine pushed up energy costs and triggered double-digit power bill rises. The direction has now turned, but the regulator’s announcement still leaves South Australia with a small increase and households on different networks facing very different outcomes from the same price decision.
