Electricity retailers must pass on price savings to consumers: Energy Minister Tom Koutsantonis

Electricity retailers must pass on a plunge in their costs to householders, Energy Minister Tom Koutsantonis is demanding.

Electricity retailers must pass on savings to households from a sharp fall in wholesale costs revealed in a key official report, says Energy Minister Tom Koutsantonis.

Issuing the demand as an Australian Energy Regulator report revealed a 44 per cent South Australian wholesale power price plunge, Mr Koutsantonis declared electricity retailers had run out of excuses to keep pocketing profits.

Record rooftop solar output drove a record minimum daily demand for electricity in SA and Victoria during the last quarter of 2023, when SA’s solar contribution was greater than the state’s entire demand and the excess power exported to Victoria.

The AER report showed the average SA wholesale price was $53 per megawatt hour, down from $80/MWh in the final quarter of 2022, and that more than 75 per cent of electricity generated in SA during 2023 was from renewable energy.

Energy Minister Tom Koutsantonis. Picture Dean Martin

Mr Koutsantonis argued the state’s high proportion of renewables was key to prices being lower than in NSW and Queensland, with black coal-fired power stations.

He said the AER report was further evidence that electricity prices were “heading in the right direction, going down after the international energy crisis of 2022”.

“There can be no more excuses from retailers – they simply must pass on these savings to consumers, not simply pocket extra profits,” Mr Koutsantonis said.

“Generation and network costs are by far the biggest components of household electricity bills. Retailers must acknowledge that their costs have fallen – and pass those savings on to households and businesses.”

Revealing the wholesale price fell well below 2022 levels across all regions, the AER report says this will “take time to be reflected in prices faced by consumers”.

But Mr Koutsantonis said the AER would need to factor this expectation of lower consumer prices when setting the benchmark default market offer for the 2024-25 year.

Grattan Institute energy program director Tony Wood said householders could get some power bill relief by July because factors were heading in a better direction but there was still much to play out.

Transmission towers near Torrens Island power station. Picture Dean Martin

Australian Energy Council chief executive Sarah McNamara said energy retailers were acutely aware of customers’ cost-of-living challenges and signalled wholesale cost savings would be passed on to households.

“Given how competitive the market is, retailers are always looking to pass on savings,” she said.

Originally published as Electricity retailers must pass on price savings to consumers: Energy Minister Tom Koutsantonis