Lower electricity bills expected after lockdown high usage
The Australian Competition and Consumer Commission (ACCC) predicts that your power bills will be lower this year due to considerable drops in wholesale electricity costs and new laws requiring electricity retailers to pass on those savings.
This price drop will occur despite the increase in usage throughout 2020. As offices were closed and people were forced to work remotely, Australian households used 10% more power, leading to a 7% increase in household bills.
“COVID-19 had a major effect on electricity use last year. Many households that were already experiencing financial difficulty had higher electricity bills to pay,” ACCC Chair Rod Sims said.
Although there was an increase in usage, there was a decrease in costs for retailers. The average wholesale spot prices, which is what suppliers pay day-to-day for uncontracted electricity, fell by 50% between 2019 and 2020.
Good news for consumers: The ACCC predicts that retailers’ wholesale costs will remain low, and these savings will be passed on to customers.
In June 2020, the Prohibiting Energy Market Misconduct (PEMM) came into effect. The new law requires changes in wholesale electricity prices to be reflected in consumer costs.
“We expect 2021 to be a better year for households and small businesses as large reductions in the wholesale cost of electricity continue to flow through to people’s bills,” Sims said.
“The ACCC is currently investigating a number of electricity retailers’ prices to see if recent wholesale price reductions are being passed on to consumers, as required by law.”
Although ACCC will be looking into whether electricity retailers follow the new PEMM law, Mr Sims encouraged Australians to explore the market for potential savings on their electricity bill.
So, if you think you could be getting a better deal on your electricity bill, why not check out our Mozo energy comparison tool?