Canberra households can expect to pay upwards of $300 more a year for their electricity from July, after the territory’s pricing regulator announced a nearly 20 per cent increase in retail power prices for the Capital Territory, driven by soaring wholesale prices.
In its final report and price direction on Wednesday, the ACT Independent Competition and Regulatory Commission said ACT households could expect an 18.95 per cent increase in electricity prices come July, pushing bills up by around $6.40 per week, or $333 a year.
The power price hike follows similar adjustments around the country, including in Queensland, where the Queensland Competition Authority recently flagged a 7-8 per cent rise in electricity prices in 2017-18.
And it signals more pain to come for other Australian states, where the full cost of the wholesale market turmoil has yet to be factored in, particularly in NSW where a doubling in feed in solar tariffs suggest a rise of 20 per cent or more in retail electricity prices.
These gains come as new data showing that the rate of rooftop installations is now at its highest ever level in Australia, beating even those periods where generous feed in tariffs were on offer.
The ICRC said that the “sharp increase” in ACT retail prices – which have come in at the top of expectations – had been driven almost exclusively by the soaring wholesale prices, particularly in the neighbouring NSW market.
“The single biggest driver of the increase in electricity prices has been the substantial jump in the forward prices of wholesale electricity contracts,” the ICRC statement said.
From May 31 2016 to 31 May 2017, it noted, wholesale electricity prices increased from 49.77 to 105.69 dollars per megawatt hour ($/MWh) – an increase of 112.36 per cent.
“It is important to note that almost 88 per cent of total costs are determined outside of ActewAGL Retail’s control and therefore the Commission’s oversight,” the ICRC said.
“This includes electricity purchase costs and network costs.”
On network costs, the Commission noted that the outcome of the recent NSW Federal Court appeal – an ongoing saga that we last reported on here – was likely to result in an increase in network charges that, once determined by the AER, would also be passed on to electricity bills.
ActewAGL, the government-owned retailer that will be passing on the price hike, has responded to the determination by establishing a $250,000 Energy Support Fund, and by issuing a statement from the CEO, along with an explainer about why energy is getting more and more expensive in Australia.
“Ten years of uncertainty in national energy policy has resulted in an unprecedented increase in gas and electricity prices from 1 July this year,” wrote ActewAGL CEO Michael Costello on Wednesday.
“This in turn has created an investment climate of such uncertainty as to culminate in a doubling of wholesale electricity prices over the past year.
“It is this wholesale price increase that accounts for most of the 18.95 per cent increase in electricity prices,” Costello said, noting that the wholesale gas price had also approximately doubled in the past 12 months; “in this case because Australia now exports about 10-times the amount of gas we use domestically, cutting local supply.”
Again, Costello added, “this is the result of national policy not taking account of the impact on the local market of the massive gas export licences granted.”
Costello said the utility’s main message to the community was that help was available for those who were struggling to pay their bills.
This included energy vouchers for distribution through community groups, a Solar Grants Program for eligible community organisations, and a dedicated Bill Help Hotline.
