Households are being urged to check the price they are paying for electricity after it was revealed that prices across the eastern seaboard have fallen significantly in the back half of 2020, official figures show.
Stats released by the ACCC showed that the cost of electricity has fallen by 8.8 per cent across NSW, Victoria, South-East Queensland, South Australia and the ACT.
The new lower price of electricity sees consumers collectively save $900 million compared with June 2020, with the average household pocketing $126.
ACCC chair Rod Sims encouraged consumers to take advantage of falling electricity prices.
“There are two ways that households and small businesses can get the hip-pocket benefit of recent reductions in retailers’ costs: by changing to a new, cheaper plan; or, by waiting for their retailer to lower the rates on the plan that they’re already on,” Mr Sims noted.
Why are prices falling?
The ACCC has pointed to new Prohibiting Energy Market Misconduct (PEMM) laws, which came into effect in June 2020, requiring electricity retailers to make reasonable adjustments to their prices in line with their costs of procuring electricity.
Companies that fail to comply with the laws face serious penalties, including fines of up to $10 million or 10 per cent of their turnover per breach.
“A significant increase in generation capacity, attributed to renewable generation and falling fuel costs, has led to much lower wholesale electricity costs, and it’s vital that all Australians now see the savings,” Mr Sims said.
“Prior to this, we had a decade of sustained electricity price increases that placed unacceptable pressure on households and small businesses.”
How much could you be saving?
The ACCC noted that the price of electricity and the potential savings for consumers vary greatly from state to state.
In Victoria, flat rate offer prices have reduced by 11.1 per cent to 14.2 per cent, and a typical household on a flat rate offer could save between $171 and $198 a year.
In NSW, flat rate offer prices have reduced by 4.7 per cent to 6.9 per cent, and a typical household on a flat rate offer could save between $80 and $88 a year.
In South-East Queensland, flat rate offer prices have reduced by 9 per cent, and a typical household on a flat rate offer could save $126.
In South Australia, flat rate offer prices have reduced by 6.8 per cent, and a typical household on a flat rate offer could save $118.
In the ACT, flat rate offer prices have reduced by 2.6 per cent, and a typical household on a flat rate offer should save $46.
“While the ACCC will be enforcing the new laws, we also urge people who haven’t seen their bill come down to contact their electricity retailer and ask to be put on the best offer for their circumstances,” Mr Sims concluded.
To find out more on how you can save money, get in touch with a Centra Money finance specialist for a confidential and obligation-free appointment at (08) 8211 7180 or info@centramoney.com.au
Article by Cameron Micallef on 14 April 2021 – nestegg.com.au