Power bills slashed for half a million families

A major energy retailer is giving its customers a handy Christmas present this year, slashing power costs.

Origin Energy is slashing the cost of power.

Hundreds of thousands of families will have their power bills slashed next month, with electricity retailers handing out Christmas discounts after years of hip-pocket pain.

The Herald Sun can reveal Origin Energy, which services about half a million Victorian households, will cut electricity prices by an average of 11 per cent on January 1.

This will save the average household on a variable rate plan about $186 next year as prices fall to the lowest level in five years.

Other retailers are likely to follow Origin’s lead, after the regulated default offer — designed to provide a simple and affordable deal to all Victorians — was also cut by 10 per cent.

About 125,000 households who are on the default offer will have their average annual bill cut from $1517 to $1358 next year.

Businesses will also share in the much-needed relief, with a 14 per cent cut to the default offer saving about 40,000 small businesses an average of $916 next year.

Origin will cut its small business variable rate by 13 per cent, delivering their customers an average annual saving of $576.

But Origin will increase natural gas prices for the first time in three years.

From next month, the standing offer gas price for households will increase by 2.7 per cent, amounting to an extra $34 in 2021, while small business customers will be charged an extra 4.2 per cent, the equivalent of an average $160 annual increase.

Origin executive retail general manager Jon Briskin said that for most customers, the gas price increase would be “well offset” by the electricity savings.

“Following what has been an incredibly difficult year, it is good to be able to pass on lower electricity prices for our Victorian customers and hopefully provide some welcome hip-pocket relief heading into the new year,” he said.

Servicing 18 per cent of Victorian households, Origin is one of the biggest players in the consumer electricity retail market along with AGL and EnergyAustralia, which will write to its customers later this month to advise them of its 2021 prices.

The Essential Services Commission’s decision on the default offer will also cut costs for 140,000 Victorians who access power through embedded networks, such as in apartment buildings and caravan parks.

Commission pricing director Marcus Crudden said falling power prices were due to a decline in wholesale and network costs, the major contributor to rising and falling consumer bills.

Mr Crudden said the discounts would “assist many Victorian households and small businesses in recovering from the impacts of the coronavirus pandemic”.

It comes after the state government revealed it would provide a one-off $250 payment to about 950,000 households — including anyone on JobSeeker, youth allowance or the pension — to help with their power bills.

Mr Briskin said many Victorians would “continue to do it tough” next year.

“We will keep supporting them and providing assistance with their bills,” he said.

“Any customer that stays in touch with us about their financial difficulty will be protected from disconnection or default listing until at least 31 March 2021 and potentially beyond.”