Hardship increases as energy pain forces electricity disconnections
Australia’s energy market worsened in 2017-18, with household electricity bills up as much as 22 per cent.
Australia’s energy market worsened in 2017-18, with household electricity bills up as much as 22 per cent and rising numbers of people falling into hardship programs or disconnecting amid a vacuum in national energy policy, according to the market regulator.
Energy became less affordable in 2017-18, according to the Australian Energy Regulator, with low income households in South Australia spending 11.2 per cent of disposable income on their electricity bills. Disconnections increased by 7172 over the previous year to 72,100, the AER retail energy market report said.
More electricity and gas customers went into hardship programs offered by retailers but fewer completed them successfully than in the previous year, the AER said. The figures cover the period before the collapse of the federal government’s national energy guarantee and Scott Morrison’s move to focus policy on pushing prices lower, including “big stick” regulation to break up energy companies that gouge customers.
Customers in SA, NSW and the ACT had increases of 21.1 per cent to 22.1 per cent in the price of “standard offers” that apply to around 12 per cent of 6 million customers in the national electricity market. Prices for the more widely used market offers increased at a higher rate than the previous financial year, up as much as 22.6 per cent in the ACT and 11.5 per cent in NSW. Queensland was the only state to record a fall, with offer prices down 1.6 per cent.
More recent pricing offers show there will be little relief for most customers, despite the threat of big-stick regulation. Market offers announced in June for NSW, Queensland, the ACT and SA and last month for Victoria were flat, but retailers did announce, or extend, cuts to standing offers.
Energy retailers said they were forced to absorb tens of millions of dollars each in rising wholesale energy, green schemes and regulated network charges that they did not control.
AER board member Jim Cox said too many customers remained on expensive standing offers and that plans for a default market offer would provide some savings.
The default offer is among measures the federal government is considering to push energy prices down, including a reference bill mechanism that would help reduce the complexity in comparing market offers.
Energy Minister Angus Taylor will today announce a scheme for new generation investment that will try to create a stream of projects producing 30MW or more of “firm” power.
The scheme will be technology neutral, meaning support such as loans and floor prices would be available for both new projects and upgrades to existing generation assets such as coal-fired power stations.
The government must also decide whether to proceed with the Snowy 2.0 expansion after the board last night approved the estimated $4 billion project.