Australian Government-led reforms to the energy sector are expected to provide businesses and households with cheaper electricity bills, with price determinations to provide a guide on charges.
The Australian Energy Regulator (AER) last week delivered price determinations on what network businesses can charge for ‘poles and wires’ over a five-year period, a move the Government says will result in NSW and ACT households and businesses paying 5-12 per cent less in their electricity bills.
The AER’s final price determination, which will come into effect on July 1, will see consumers in South Australia paying around $200 less in 2015-2016, while those in Queensland will only see a reduction of around $34 thanks to the price of state-based solar bonus scheme subsidies.
“Under arrangements established by the COAG Energy Council, chaired by the Commonwealth, there are new rules for the Australian Energy Regulator so it has the power to ensure that network businesses are only charging customers for necessary and efficient costs,” Minister for Industry and Science Ian Macfarlane said.
“The AER approves how much network businesses can earn during a five year period and therefore, how much customers can be charged for the network component of their bills. Network prices make up around 50 per cent of electricity bills so they are a key factor influencing overall prices.”
According to Small Business Minister Bruce Billson, the reforms mark yet another positive move for energy consumers following the repeal of the carbon tax. The average amount of carbon tax cost savings as of March/April 14 prices include a result of -6.90 per cent in NSW, -8.10 per cent in Queensland, -8.40 per cent in WA, and -11.10 per cent in the ACT.
“Last year customers and businesses saw the first decrease to electricity bills in the last decade following the carbon tax repeal,” Mr Billson said in a statement on April 29.
“The ACCC’s March quarterly carbon report released yesterday re-confirmed that the legislation is working and households and businesses are saving money.
“Today, the AER’s decision shows that customers will also now see significant reductions in their network costs and our Energy White Paper will ensure the market keeps driving down costs.”