The ACCC electricity affordability report: how Aussies can save up to $415 on their electricity bills
While many Aussies are breathing a sigh of relief following the July 1 energy price updates, new findings from today’s ACCC report could save households hundreds on their future electricity bills.
The inquiry, which began in March 2017, aimed to find the underlying cause of high electricity prices in order to improve energy affordability.
“The National Electricity Market is largely broken and needs to be reset. Previous approaches to policy, regulatory design and competition in this sector over at least the past decade have resulted in a serious electricity affordability problem for consumers and businesses,” said ACCC Chair, Rod Sims.
“It is clear that most households are paying far too much for electricity. In addition, some of the most vulnerable in our community are forced to struggle through freezing winters and scorching summers, with many others also having difficulty paying their bills.”
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Repairing the damage in 56 days
The ACCC made 56 recommendations to help repair the National Energy Market (NEM), which target energy retailers and governments across the country. Some of the recommendations included:
Abolishing retail ‘standing’ offers (price offers set by the government that are not consistent) and replacing with ‘default’ offers (consistent prices across all retailers that are set by the Australian Energy Regulator)
Retailers to reference discounts to the new ‘default’ offer, making it simpler for customers to compare prices - conditional discounts, like ‘pay-on-time’ discounts should not be included in headline discount claim
Government support to make profitable new investment by new players in generation capacity to help both commercial and industrial customers and drive competition
Improve AER power to investigate and address problems in the market, while increasing penalties for serious wrongdoings
“One of the most important recommendations is to move customers off excessively high ‘standing’ offers to a new standard ‘default’ offer to be independently set by the Australian Energy Regulator, says Sims.
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So how much are Aussies set to save?
According to the ACCC, if these recommendations are put to work, Aussie households would save 20% - 25% on their electricity bills, or $290 - $415 annually.
And moving residential customers still on ‘standing’ offers over to the new ‘default’ offers could save households $500 - $750, or 30% - 35% of their bills.
Small to medium businesses weren’t left out either, as the average business owner could potentially save 24% on their bill. Moving businesses over to default offers would also see savings of up to $2,250 or 35%.
“Many small to medium businesses operate on very small margins, and cannot afford the increases to their costs that have occurred over past years,” explained Sims.
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Meanwhile, commercial and industrial companies, like those in mining or manufacturing, would see a price drop of 26%.
“Commercial and industrial customers have watched what has been a relative competitive advantage to them, affordable electricity, now threatening their viability.”
However, until these recommendations are adopted and come into effect, Aussies can still compare their energy options to make sure they’re still on the best value plan.
