Households in the ACT are set to pay more for electricity, with daily supply charges increasing in the nation’s capital from the end of next month.
The Australian Energy Regulator (AER) has approved a price increase of distribution charges to customers on the Evoenergy Network – ACT’s leading electricity distributor – in line with the distributor’s 2021-22 pricing proposal.
As of 1 July 2021, Canberra residents can expect a typical annual bill increase of $241 for households and $1,476 for small businesses – an increase of about $5 a week for residential customers.
The price hike comes at a confusing time for customers, with wholesale electricity prices significantly lower in the last year, and an anticipated reference price reduction in July 2021 for those living in the surrounding regions of New South Wales.
The latest price increase is attributed to the ACT’s 100 per cent renewable energy target established in 2020, which requires Evoenergy to pay for large-scale wind and solar generators to meet renewable energy targets.
Evoenergy’s General Manager Peter Billing said that top up payments made to renewable energy generators would result in extra costs, to be passed onto energy customers.
“Over the past year, there has been a significant drop in wholesale electricity prices making them much lower than the contract prices the ACT Government established with large-scale generators. This has resulted in significant top-up payments required to cover the difference,” he said.
“We understand it can be confusing when wholesale prices are going down and these costs have gone up. The reality is these costs are fixed by contracts whereas the electricity market and the wholesale electricity price moves based on supply and demand.
“We know an increase in electricity costs will be difficult for many people, especially for those already doing it tough. I strongly encourage anyone having trouble paying their bill to contact their energy retailer to seek assistance.”
Why is the price increase so high in the ACT?
Since 2020, the ACT has had the target of being 100 per cent renewable in its electricity usage. As such, the pre-existing generators on the ACT electricity grid require a transition from fossil fuels to renewable energy – a task which is not cheap.
In addition to the significant costs to go renewable, wholesale electricity prices have also been historically low in the ACT – thus affecting the bottom line of electricity retailers and by default of distributors like Evoenergy. As a means to cover these network changes and recovering revenue, the ACT has had to increase the price of distributing electricity to customers.
How will this affect my electricity bill?
As of 1 July 2021, this network tariff will tack on an extra $241 per year on the electricity bills of residential customers in the ACT. While at this stage the increase will most likely only affect the daily supply charge on your bill – the amount charged to provide electricity to your house per day – there is the chance of a slight price increase for usage rates too, as electricity providers look to recover costs incurred from the distributor.
It’s important to note here that the price increase is being carried out by the electricity distributor, not retailers. This means that the price increase is carried across to your provider, not to you as a customer directly. It is then up to your provider to decide the best way to recover these new costs, which will likely be through increased usage rate charges.
Which retailers will be affected by this?
As Evoenergy is the main distributor in the ACT, it’s probably safe to assume all retailers on the Evoenergy network will be affected by this price increase, including:
- Amber Electric
- Energy Locals
- Origin Energy
- Radian Energy
- ReAmped Energy
- Red Energy
Anyone concerned about the price increase to their energy bill is advised to contact their retailer for options regarding financial assistance packages or schemes. Alternatively, this could be the perfect time to shop around and compare electricity providers to find a better deal.
Compare Electricity Plans in Canberra
Here are some of the cheapest published deals from the retailers on our database for the ACT. These costs are based on annual energy usage of 5499kWh/year for a residential customer on a single rate tariff, and a selected postcode in Canberra, but these prices will vary depending on your own circumstances. We show one product per retailer, listed in order of price. Use our comparison tool for a specific comparison in your area. This table includes products from referral partners†. Our database may not cover all deals available in your area, and please check retailer websites for up to date information.
Is this only happening in the ACT?
The AER has also approved price changes for electricity network distributors in New South Wales, Queensland, South Australia and Tasmania, although ACT will see the largest price increase. The Essential Services Commission in Victoria hasn’t released any mid-year network tariff updates yet.
The following is a comprehensive table of expected price changes for network tariffs in Australia, from 1 July, 2021:
|State||Electricity Distributor||Price Change Households||Price Change Small Businesses|
|SA||SA Power Networks||$5||$20|
Information sourced from the Australian Energy Regulator. Accurate as of May 2021.
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