Labor set to fail $275 power bill saving promise unless 2025 default offers slash energy costs

Energy companies must provide cuts of up to $1,238 on the typical annual household power bill next year for the Albanese Government to meet its election promise to deliver a $275 saving.

Energy companies must provide cuts of up to $1,238 on the typical annual household power bill next year for the Albanese Government to meet its election promise to deliver a $275 saving.

More than two years since Labor pledged its energy reforms would save Australians 18 per cent on power — about $275 off the average bill — by 2025, new analysis shows the default market offer (DMO) for next year would have to slash current prices by up to 47 per cent in some parts of Australia to meet this goal.

A draft of the DMO, which sets the maximum price a household can be charged for electricity, for 2024-24 is due to be published by the Australian Energy Regulator (AER) later this month and will provide the first insight into how far off Labor is from its $275 promise.

Coalition analysis comparing the default offer in 2021-22 to now, shows the upcoming DMO would have to result in Australian distribution networks cutting between $536.82 and $1,238 for households to genuinely save $275.

The figures do not factor in energy bill subsidies provided to some households, which the AER has said means electricity prices are about 25 per cent less now than what they would have been before Labor’s intervention.

Coalition Climate Change and Energy spokesman Ted O'Brien says Labor must front up and apologise if it fails to deliver $275 power bill saving to households.

Coalition climate change and energy spokesman Ted O’Brien said soaring power bills were pushing Australians into “energy poverty” and “jeopardising” the future of local manufacturing.

“If Australians are not assured of a reduction in household energy bills by up to $1,238 with the announcement of the AER’s draft market offer in coming weeks, it will be for Prime Minister Albanese to front up and apologise,” he said.

Climate Change and Energy Minister Chris Bowen says Labor’s power bill relief, which was not backed by the Coalition, is helping many Australians. Picture: NCA NewsWire / Martin Ollman

Mr O’Brien said Labor had “dodged questions” about their $275 energy price promise for two years, but could no longer do so once the default offers for 2025 were released.

“The moment of truth is fast approaching,” he said.

A spokeswoman for Climate Change and Energy Minister Chris Bowen said renewable energy was the cheapest form of power and having it in the system puts downward pressure on bills.

“Labor’s Energy Price Relief Plan is shielding Australians from the worst impacts of the global energy crisis,” she said.

“The Liberals need to explain why they voted against this relief.”

The spokeswoman said Russia’s illegal invasion of Ukraine had caused 90 per cent of energy price rises around the world.

For Ausgrid customers in NSW areas such as Newcastle, Sydney and Gosford, the default offer has increased 34 per cent since 2021-22, making a typical household bill $2,562.

This means the upcoming DMO for next financial year would have to cut $925.

The highest cut most come for Endeavour customers, which covers areas like Fairfield, Penrith, Parramatta and Nowra, with a $1,238 cut required to achieve the election pledge.

While Essential customers in places such as Lismore, Port Macquarie, Dubbo, Wagga Wagga and Albury, a $981 cut off a typical bill would be needed to deliver the promise.

Melissa D’Innocenzo with her son Enzo, 2. She says energy bills are one of many cost-of-living pressures on household budgets. Picture: Tim Hunter

Drummoyne mother Melissa D’Innocenzo said she was “concerned” about energy prices, with her own household bill jumping by about $80 a month.

“Everything is rising. It’s not only the electricity but things like groceries too,” she said.

Ms D’Innocenzo called on the government to help with all cost of living pressures placed on Sydney families.

“We need to think how we can manage all things and help with that,” she said.

For Energex customers across southeast Queensland, including Brisbane, Beenleigh, Ipswich, Gympie and Noosa the typical household bill has risen 35.7 per cent since 2021-22 to $2,363.

This means the DMO would have to deliver a cut of about $897 for Queenslanders to genuinely receive the $275 saving.

For SA Power Networks customers the typical household bill has risen about 34 per cent to $2,787.

This means the DMO would have to deliver a cut of about $985 for South Australians to genuinely receive the $275 saving.

In Victoria, which has its own separate Victorian Default Offer (VDO) AusNet customers in areas such as Wangaratta, Wodonga, Lilydale and Epping, the larger cut of $779.56 off the typical bill would have to be cut.

Jemena customers in parts of Melbourne like Essendon, Coburg and Footscray would need a $651.07 cut, Powercor customers in regions like Ballarat and Shepparton would need a $681.12 cut, and United Energy Network customers in places like Dandenong and Mornington would need a $654.37 cut.

While CitiPower customers across Melbourne in suburbs like St Kilda, Princes Hill and Fitzroy the cut would have to be $536.82 to deliver the promise.