More than half a million Victorian households will see electricity prices drop by an average of $84 next financial year, while small businesses will save an average of $241.
Victoria’s energy price regulator, the Essential Services Commission, has announced its prepayment offering will be reduced by an average of 5 per cent for residential properties and 6 per cent for small businesses in the next financial year.
About 512,000 households and 62,000 small businesses are on the default electricity price offer. The regulator sets a default option to provide a basic energy plan for those who do not want to engage with energy retailers, including 182,000 customers living in apartments and caravan parks who cannot choose their own energy supplier.
Discounts will vary between energy suppliers. 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 chairman Gerard Brody said the state’s electricity prices were set independently of energy retailers to give Victorians “access to a fair deal”.
“Lower electricity prices will be good news for Victorian households and small businesses who continue to face cost of living pressures,” he said.
In its final decision document, the commission said the reduction in the prepaid offer was due to the reduction of environmental, network and general electricity costs in the coming financial year.
The commission said global oil supply disruptions, including those caused by the Iran war, had “a mixed but generally small effect” on the cost of electricity futures contracts.
The drop in Victoria’s standard electricity price stands in contrast to expected cost increases for other eastern states.
In its draft decision in March, the Australian Energy Regulator – which sets default market offers for NSW, South Australia and south-east Queensland – said residential prices would rise between 2.5 and 8.9 per cent depending on the region.
A final decision on its default offer will be published by the AER on Tuesday.
Victorian Energy Minister Lily D’Ambrosio said the government had invested in renewable energy to make “life affordable” in the state.
A draft ESC paper in March previously predicted a drop in the most common bill of $46 per year.
In a submission to the draft paper, the Energy Council of Australia said the cost cuts would not be indicative of a “low price environment” across the state.
The AEC said network costs continue to rise and account for a large share of electricity costs, while the national wholesale electricity price remains volatile.
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