ACT electricity prices could rise by 17%, regulator warns: What can you do?
Residents in Canberra and the wider ACT may soon face another cost of living blow unless they shop around.
The ACT's economic regulator has released a 'draft decision' on how it will set electricity prices for the next 3 years.
Its new methodology will take into account additional costs that are being incurred, which could lead to a 'significant' increase in power prices.
How much will electricity prices go up in the ACT?
If the draft decision by the Independent Competition and Regulatory Commission (ICRC) goes through, ACT electricity prices could jump by 17% (or 12% if you consider inflation) for standard offer contracts.
For example, the current standing offer price for a single-rate tariff plan from ActewAGL is $2,152 for the year.
Based on that, households could be paying an additional $360+ with current price hike predictions.
How do I avoid the price hike if it goes through?
The price increase will impact standing offer plans as they're equivalent to the benchmark or reference pricing set by the regulator each year.
Standing offer plans are a safety net for households that don't shop around for electricity plans.
It may also apply to people who haven't negotiated a new plan with their existing provider in over 12 months. By default, you could have been moved to a standing offer plan.
Ideally, you want to be on a market offer plan. It's usually cheaper than a standing offer and can come with additional benefits such as sign-up discounts, rewards points and more.
According to the economic watchdog, "a customer could save up to $700 per year by moving from a standing offer to the lowest market offer."
If you haven't shopped around in 6-12 months, it's a good idea to shop around right now for a cheaper offer and then compare again come 1 July 2024.
All you need to do to start is enter your postcode in the box and compare electricity plans in the ACT.
- Keep in mind: When standing offer prices go up, market offers can also become more expensive. However, you're almost always going to be better off on a market offer plan.
Why will electricity prices rise on 1 July 2024 in the ACT?
We've all dreaded the arrival of 1 July over the last couple of years following back-to-back energy price hikes.
It's the date when new benchmark power prices come into effect in the majority of the states and territories in Australia.
Energy providers then use these benchmark prices to make their changes, which impacts how much we, as residential customers, end up paying for electricity.
Despite the indicative increase in regulated electricity prices, we expect the average bill for Canberrans on standing offers will be lower than average standing offer bills in Victoria, New South Wales, South Australia and Queensland — ICRC senior commissioner Joe Dimasi
A public hearing will be held on 7 February 2024 and further amendments will be made before a final decision is released by the ICRC.
According to the ICRC, the expenses from the ACT government's large-scale feed-in tariff (LFiT) scheme is a major driver for the expected electricity price hike.
In 2023, the LFiT shielded households from large power price increases and, in fact, residents even ended up getting a rebate.
This time around, the commission believes the overall cost of the LFiT will be passed on to consumers, but a final estimate is yet to be determined.
The result will impact the exact electricity price hike in the ACT.
Image: @AleksandarNakic via Canva.com