Electricity prices fall, but if you don’t check your energy plan, you’ll miss out
Wholesale electricity prices in the eastern states drop "significantly" between 29% and 44%.
New Treasury analysis shows a drop in wholesale electricity prices across the 4 major states, with Queensland delivering the largest fall.
- Queensland: 44%
- NSW: 38%
- South Australia: 32%
- Victoria: 29%
This will eventually lower household electricity bills by $230 in 2023–24 once the lower prices flow through.
Last year's federal budget had predicted power bills would rise by 56% over 2 years if electricity prices continued their upward trajectory.
The Treasury then compiled data from the Australian Stock Exchange to look at trends before and after the government intervention.
This included capping the whole coal price at $125 per tonne as well as gas for the east coast at $12 per gigajoule for 12 months.
And while retailers aren't happy with the move, citing supply issues at the capped price, it seems the prospects for lower bills are looking better.
Here's why some retailers are slinging a gas price hike of 20% or more on 1 February.
"The price rises that were forecast were untenable and that's why we acted. Our intervention will help take some of the sting out of power prices for families and businesses," said treasurer Jim Chalmers.
"This isn't an overnight fix, it's going to take some time, but it's heartening to see the plan is already starting to work."
However, on the opposing side, chief executive Samantha McCulloch of the Australian Petroleum Production and Exploration Association, said the government intervention would provide no benefit to households.
This is because 90% of the gas supply for 2023 has already been locked in.
Why do I need to keep on top of my electricity bills?
Wholesale electricity prices determine the cost of buying power for the retailer.
This makes up 40% of the costs included in your household's energy bill.
If the retailer secured its electricity supply at a higher cost, it'll pass this on to you. This is why you might not notice your bills going down instantly.
What all of these movements in the gas and electricity markets shows is you need to pay a close eye on your energy bills.
- Compare both your electricity and gas plans if you haven't done so in the last 6–12 months. You can use Finder's free-to-use comparison engine to compare.
- Don't sign up to a plan that locks in your rates until 2024. Fixed rate plans were all the rage last year but given electricity prices are predicted to go down, you may not reap the benefits alongside other households.
- Act on your provider's letter about rising bills. Again, if your retailer has told you your bills are going to increase, compare your options, ask them to offer you a better deal as per your findings, and if they don't, just switch.
- Read our guide to slashing your bills in these warmer months. Top tip, keep your thermostat to 24–25 degrees and don't leave the air con on when you're not home.
Want to compare and switch energy plans? Take a look at the best and cheapest energy plans for this month. Or, just start comparing your options with Finder's comparison engine.