Many Australians expecting lower electricity bills after July 1 are instead facing higher costs, with some retailers increasing daily supply charges despite widely publicised price cuts.
Retailers Change Charging Methods
Energy retailers including Origin, AGL and EnergyAustralia have changed the way some charges are calculated, leaving many customers confused after receiving notices showing increased daily supply charges despite lower usage rates.
Australian Energy Regulator deputy chair Justin Oliver on Tuesday told Sunrise the confusion largely stemmed from the difference between regulated standing offer prices and the market contracts most Australians are actually on.
“In late May we published a decision called the default market offer, and in that decision we set prices for what are called standing offer prices, and those are safety net prices that most people actually don’t pay,” Oliver said. “Most of us are on what are called market contracts and most market contracts have prices that are lower than the regulated prices that we set in the default market offer decision.”
Mixed Changes for Customers
While customers on standing offers in Queensland and New South Wales saw prices fall from July 1, and some South Australian prices either dropped or remained steady, those on market contracts have experienced mixed changes — with some daily supply charges increasing significantly.
In Sydney, AGL’s daily supply charge has increased from 87 cents to $1.58, surprising many customers who expected their bills to decrease.
Oliver encouraged Australians concerned about rising electricity costs to compare plans, saying many households could save money by switching retailers or contracts. “Our advice to customers who’ve received those notifications and they’re worried they’re paying too much is to shop around,” he said.
Comparison Tools Available
The Australian Energy Regulator operates the Energy Made Easy comparison website, allowing consumers to compare plans across different providers. “If it’s been a couple of years since a person’s checked their price, there’s a fairly good chance they’re paying more than they need to,” Oliver said.
Broader Energy Market Challenges
Looking beyond the latest bill changes, Oliver said Australia’s ageing coal-fired power stations remained one of the biggest challenges facing the electricity market and would eventually need to be replaced. “The existing coal assets that we have are getting old. Most of them were built several decades ago. They’re starting to break down more frequently. So, they are going to need to be replaced,” he said.
Oliver said rooftop solar is now the single largest source of electricity capacity in Australia’s national energy market by some margin, arguing that while renewable infrastructure requires significant investment, building a new fleet of coal-fired power stations would likely cost consumers more in the long run. “If we built a fleet of coal-fired power stations, we’re still going to have to invest in those assets. They’re very expensive too, but we’re going to end up with a system which is going to continue to be very polluting and is still going to be fairly costly,” he said.
He added, while official modelling had not been completed, there was a “good chance” new coal-fired power stations would ultimately prove more expensive over time.
