AGL cuts electricity bills by $62 but bumps up gas for 2020-21
The falling cost of power generation in SA is set to bring down electricity bills for more households but rising gas charges could burn through those savings
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Household electricity bills will be cut from August by South Australia’s biggest retailer, AGL, delivering an annual $62 saving.
However, AGL’s gas customers will face an increase of an average $37.
The electricity price cut, averaging 2.55 per cent for households and small business, follows the falling cost of generating power in SA.
“We understand the need for affordable energy for homes and businesses during this time,” AGL chief customer officer Christine Corbett said.
“We are pleased to be able to deliver average reductions for most electricity customers in SA.”
On gas, the SA average bill will increase by 4.6 per cent.
The changes are based on AGL’s average customers, with bills for individual customers varying according to their consumption and the type of market offer they have signed up for.
Federal Energy and Emissions Reduction Minister Angus Taylor welcomed the electricity cut, saying the Government expected cheaper wholesale costs to be passed through.
“I encourage consumers to shop around as you move towards contracts rolling over – you will get a better price,” he said.
AGL has a 38 per cent share of the electricity market and 28 per cent of gas for SA’s households, according to the Australian Energy Regulator.
To date this year, wholesale electricity prices in SA are about 40 per cent cheaper than they averaged last year.
However, other components of pricing such as ancillary costs to maintain security of supply have increased this year.
As well as being a retailer, AGL operates SA’s biggest generators — Torrens Island Power Stations A and B and the adjacent Barker Inlet Power Station which started running late last year.
In 2018-19, Torrens Island supplied 20 per cent of the energy generated by SA’s commercial-scale suppliers.
Last week, the state’s second biggest retailer, Origin Energy, announced it was also cutting prices for households and businesses.
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The AGL announcement came as the Australian Energy Regulator published a discussion paper that seeks to bring wind farms more into line with gas-fired generators.
It says wind farms are no longer financially dependent on subsidy systems, they are considerably more efficient, cheaper and their output is driven by wholesale market price.
This meant it was time for wind farms to operate under arrangements where their actual output was closer to bids they submitted to the Australian Energy Market Operator.
This would reduce ancillary costs, the AER said.
The problem was particularly evident where wind farms bid to supply power at negative prices and then did not deliver.