How the July 1 Energy Price Changes will affect you
The next couple of months is leaving many Australians cold, but things may be heating up, thanks to the recent electricity price changes. While many major retailers have increased prices across New South Wales, Queensland and South Australia, the new regulations have made it easier to choose the best plan and find more affordable options.
Offering Discounted Market Prices
Price regulation efforts by the Australian Energy Regulator (AER) have led to the creation of “Default Market Offer” or DMO prices. Made to combat the unjustifiably high electricity prices, these new determined DMO prices are set at a level that most customers on standing offers would appreciate. Aside from protecting energy consumers, it’s also meant to encourage more innovative competition among the major retailers.
The existence of DMO prices will hopefully lead to more energy savings. For example, residential customers in NSW can expect annual savings between $129 and $181, while those in South-Eastern QLD can expect $118 annual savings. Residents in SA can look forward to approximately $171 in price savings. Basically, customers who were previously on standing offers are now on cheaper regulated tariffs.
Working with the Rising Cost of Energy
The path isn’t so great for everyone. Specifically, if you are on market offer, you might not be as thankful as those on standing offers. Several retailers have made changes in their price, and not for the better. In QLD, energy providers like AGL and Alinta Energy have increased their prices, while EnergyAustralia and Red Energy have decreased their price.
If you’re on market offer, you might not appreciate the recent price changes. You can expect anywhere between $25 and $100 more in your annual electricity bill, depending on your plan and energy retailer. It’s best to look closer at the offered plans and the rates listed by your provider.
There is a lot of uncertainty in the energy market, driven in part by politics and government policy. There’s a high demand from customers to bring down the wholesale price of electricity, which accounts for roughly a third of the household total bill. The wholesale price is the cost generators charge to the retailers.
The volatility of the wholesale price, coupled by the industry’s trend towards increasing the bill, is leaving many Aussies unsatisfied.
Making the Choice of Energy Retailer Easier
Part of protecting you as a consumer is making sure that you choose the best energy retailer for your needs. Thanks to the new regulations, energy providers now need to use the DMO price as a “reference price" for all of their discounts and energy plans. This helps customers decide on the true value of every option based on a DMO price standard.
Even with this policy, most Aussies still need to do some searching for the best deals in energy. While the default offer is improving, market offers can still provide a better option for many people. With the DMO price as a reference bill, the process of finding a good market offer is now easier.
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