Power prices are coming down
Electricity prices for households and small businesses will start to fall from July, in a draft ruling welcomed by the South Australian Government.
The cuts of 2.5 per cent, or $57, for average households and 8.2 per cent, or $481, for small business were announced this morning by the Australian Energy Regulator.
The price reductions are in stark contrast to outrageous fear-mongering by the Liberal Opposition earlier this week as well as claims by so-called experts that prices would rise by as much as 25 per cent.
The AER independently sets a ceiling price each year – called the Default Market Offer – which provides a safety net for consumers who have not shopped around for a better deal, and acts as the comparison point for all retail contracts.
With increasing renewable energy generation in South Australia, wholesale electricity costs have fallen dramatically. Lower wholesale costs are the main factor in the AER’s draft decision to cut prices.
The AER has invited comment on its draft determination until 9 April and is due to announce a final decision before the end of May with the new prices to take effect on 1 July 2024.
Poles-and-wires network charges in retail bills will increase by less than expected because of a change in accounting classification for some work performed by distributor SA Power Networks. These network charges will include sharing the cost of repairs following the River Murray floods and transmission upgrades.
Quotes
Attributable to Tom Koutsantonis
We know consumers and small businesses have been feeling the impact of inflation and cost-of-living pressures, so these price cuts are welcomed because they show energy prices are going in the right direction.
The Liberal Opposition and so-called energy experts who sought to cynically scare consumers with ill-informed predictions of 25 per cent price increases have egg on their faces today.
We’ve been saying for months we expect to see reductions in wholesale costs reflected in the retail prices handed down by the Australian Energy Regulator, and that is exactly what has happened.
The regulator’s reasons for these cuts verify what we have been saying for the past two years - the global gas price shock from Russia’s invasion of Ukraine caused high power prices here.
The failure by the Liberal-National Coalition in Canberra to settle on an energy policy and the complacency of the Marshall Liberal government left us vulnerable to those price spikes.
We are making SA more resilient against such shocks by developing our Hydrogen Jobs Plan and supporting new renewable generators and batteries, with ZEN Energy just today announcing construction of a brand new 111-Megawatt battery at Templers.
While the Opposition is out there frightening South Australians with unfounded claims, we are getting on with building and supporting a system to deliver and sustain cleaner, more affordable and reliable energy.