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More than half a million Victorian households will see their electricity prices drop by an average of $84 next financial year, while small business owners will save an average of $241.
Victoria’s energy price regulator, the Essential Services Commission, has announced its default offer will reduce by an average of 5 per cent for residential properties and 6 per cent for small businesses in the upcoming financial year.
About 512,000 households and 62,000 small businesses are on the state’s default power pricing offer. The regulator sets the default offer to provide a basic energy plan for those who don’t want to engage with energy retailers, as well as the 182,000 customers living in apartments and caravan parks who cannot pick their energy supplier.
The price reduction will vary across energy retailers. AusNet customers in eastern Victoria will see savings of $160 next financial year, while those receiving electricity from Citipower and Powercor in the state’s west will save $65 to $70.
ESC commissioner and chairperson Gerard Brody said the state’s default electricity prices were set independently of energy retailers to give Victorians “access to a fair deal”.
“Lower electricity prices will be welcome news for Victorian households and small business owners who continue to face cost-of-living pressures,” he said.
In its final decision paper, the commission said the reduced default offer was due to lower environmental, network and wholesale electricity costs in the next financial year.
The commission said global fuel supply disruptions, including those caused by the Iran war, had “mixed but generally mild impacts” on the cost of future electricity contracts.
The drop in Victoria’s default electricity price stands in contrast to cost increases projected for other eastern states.
In its draft determination in March, the Australian Energy Regulator – which sets default market offers for NSW, South Australia and south-east Queensland – said residential prices would increase between 2.5 and 8.9 per cent depending on the region.
A final decision on its default offer is to be published by the AER on Tuesday.
Victorian Energy Minister Lily D’Ambrosio said the government had invested in renewable energy to make “life cheaper” in the state.
The ESC’s draft paper in March initially forecast a more modest domestic bill drop of $46 a year.
In a submission to the draft paper, the Australian Energy Council said the cost reduction would not be indicative of a “structurally lower-cost environment” across the state.
The AEC said network costs continued to rise and account for the lion’s share of electricity expenses, while national wholesale electricity prices were still subject to volatility.
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