- The Australian Competition and Consumer Commission has released a report into the National Electricity Market, finding electricity savings among Aussie households and businesses in a number of states.
- It found savings on default electricity plans of between $130 and $430 a year for households.
- The ACCC also found that smaller electricity companies were cheaper than the ‘big three’ suppliers
Aussie households and businesses in New South Wales, South Australia, south-east Queensland and Victoria may have received savings on their electricity bills, but more still needs to be done, according to the consumer watchdog.
The Australian Competition and Consumer Commission (ACCC) released its second report into the National Electricity Market on Monday, which found an average saving on standing offers since the electricity pricing reforms came into effect in July.
Standing offers are the default electricity plans for customers who don’t (or can’t) select a market offer, according to the ACCC. The consumer watchdog explained in its report that standing offers “had become some of the most expensive electricity plans” and those who had them were “paying some of the highest prices”.
The electricity pricing reforms were designed to improve the affordability of electricity and came into effect on July 1 2019. They were based on recommendations the ACCC made in the Retail Electricity Pricing Inquiry, which spanned the electricity supply chain.
Around 800,000 households and 160,000 small businesses on standing offers were placed on new, cheaper standing offers since the reforms came into effect.
In its new report, the ACCC found that since the reforms, households have saved between $130 and $430 a year on standing offers. Businesses on average have saved up to $2050 per year.
“Prices of many standing offers have already fallen significantly, providing immediate and automatic savings for some households and small businesses,” ACCC chair Rod Sims said in a statement.
He added that the savings were “good news for these consumers” but suggested that more could be done to lower prices further.
“We are pleased about the positive changes in the electricity market so far… but urge that other key recommendations be implemented if costs are to come down further,” Sims said.
Additionally, the report showed that consumers could reap more savings on their electricity bills by comparing advertised prices and shopping around, especially with smaller electricity companies.
“There are many offers available in the market that are cheaper than the standing offers,” Sims said.
ACCC analysis of recent prices changed found that a number of smaller retailers had cheaper offers than the ‘big three’ electricity suppliers (AGL, EnergyAustralia and Origin).
It found that an average Sydney home could save around $100 a year by switching from a cheaper offer by one of the big three retailers to the cheapest market offer available.
In a joint media release between Energy Minister Angus Taylor and Treasurer Josh Frydenberg, they said that while “competition is alive” in the electricity market, there’s “still more to do.”
In the release, the ministers announced a commitment to passing so-called ‘Big Stick’ legislation which will allow, as a last resort, an energy company to be forced to divest for conducting anti-competitive behaviour, according to the Australian Financial Review.
“The Government will bring this legislation back to the Parliament at the earliest opportunity,” the ministers said in the statement.
The government shelved the bill before the May election after it failed to pass it through the Senate, the Guardian reported. The bill still faces opposition from Labor, with shadow climate change spokesperson Mark Butler describing at as a “backdoor” to privatisation of electricity assets that are usually held in public hands, according to the Guardian.
With summer right around the corner, keeping electricity bills low will be a real challenge.
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