New default scheme to slash domestic, business power bills

Power bills for 720,000 Australian households and businesses will be significantly reduced under new default market offer packages.

Energy Minister Angus Taylor at Lobs Hole, near Mount Selwyn, in the NSW Snowy Mountains on Tuesday. Picture: AAP

Power bills for 720,000 Australian households and businesses will be significantly reduced under new default market offer packages forcing energy companies to protect loyal customers.

The price mechanism, which is set by the Australian Energy Regulator and imposes a maximum price retailers can charge electricity customers on default plans, is expected to deliver savings for businesses of up to $6000.

Energy Minister Angus Taylor said the price relief for long-term energy customers in NSW, South Australia and southeast Queensland would come into effect on Wednesday and protect businesses and individuals hit by the COVID-19 economic shock.

Mr Taylor said the default market offer, which makes it easier to shop around for better deals, was introduced last year to protect loyal customers from “paying excessively high prices”.

“The government expects retailers to pass on the benefits to their customers, and it is encouraging to see some retailers are already offering cheaper deals,” Mr Taylor said. “Since the Big Stick legislation was first introduced we have seen seven consecutive months of wholesale price falls.”

The government claims larger energy-consuming businesses were likely to save more than the default market offer average. Cafes, bakeries, hairdressers and childcare centres could save between $3588 and $6053 compared to prices before July 1 last year.

Mr Taylor also revealed Australia had beaten its Kyoto-era target by up to 430m tonnes, equating to 80 per cent of a full year’s emissions.

As he works towards finalising the government’s emissions reduction strategy, he declared Australia had “overachieved on our Kyoto-era commitments”, which officially ended on June 30.

“The end of the Kyoto era and start of Paris commitment is an important milestone in global action to reduce emissions.

“Unlike the Kyoto Protocol, the Paris Agreement includes commitments from all countries and all major emitters, not just developed nations.”

Mr Taylor said the government’s technology investment road map, due to be finalised ahead of the October 6 budget, would play a central role in further reducing global emissions without slugging new costs on households and businesses. “Our commitment is clear: lower prices, keep the lights on, while doing our bit to reduce global emissions without wrecking the economy – and we are seeing results.”

Australia’s long-term emissions reduction strategy will be released ahead of next year’s UN Climate Change Conference in Glasgow. According to government data, Australia had outperformed New Zealand and Canada in beating its Kyoto-era targets. The accounting period for Australia’s Paris target, which pledges to reduce emissions by 26-28 per cent on 2005 levels by 2030, runs for a decade to June 30, 2030.

Scott Morrison – who has prioritised driving down energy prices as one of his government’s key agendas – on Tuesday announced the Snowy 2.0 project had been granted commonwealth environmental approval following a “rigorous process”.

“It’s going to take a nation to build this project because it is a nation-building project, and it’s addressing our emissions reductions targets. It’s about getting affordable energy into the system and it’s about creating these local jobs,” Mr Morrison said.

The government is positioning the development of Australia’s largest renewable energy project as the centrepiece in its bid to pump more reliable energy into the National Electricity Market and help drive down emissions and power prices.