Australia’s big three electricity retailers – AGL, Origin and EnergyAustralia – have all said there will be no price rises for Victorian customers this January.
In a move welcomed by Federal Energy Minister Angus Taylor, AGL will cut electricity prices by 1.6% – saving the average household about $23 a year – while Origin and EnergyAustralia will keep rates on hold.
AGL will also cut natural gas prices in Victoria by 0.9%, while Origin is freezing rates. However, EnergyAustralia will increase gas prices by 4.2%, costing the average household an extra $69 a year.
All electricity and gas retailers are expected to adjust their prices in Victoria this January.
The news comes at a time when the big retailers are under intense scrutiny over the cost of their most expensive standard electricity contracts, with the Australian Energy Regulator (AER) set to announce the price of new Default Market Offers in the coming weeks. These plans will replace standard contracts in a move designed to lower costs for households that do not engage in the energy market.
Mr Taylor said current standing offer prices are a ‘loyalty tax’ on those who have stayed with their energy company, find energy deals confusing, or simply don’t have the time or ability to shop around for a better deal.
“This is further proof the energy companies are hearing the Morrison government’s calls for customers to be put first,” he said. “I urge the other energy companies to give their customers a better deal.”
AGL Interim CEO, Brett Redman, said the modest cuts announced by his company will provide some relief for customers, but that work on affordability needs to continue.
“We’ve listened to the concerns of our customers, businesses, governments and regulators and are taking action to bring prices down, despite many input costs going up,” he said.
“Clearly, there’s more work that needs to be done and we will continue our efforts to improve energy affordability and help vulnerable customers.”
Origin says it will be holding electricity and gas prices flat in Victoria but will need to absorb higher network and green scheme costs to do so.
“While the wholesale price of electricity has come down from its peak, this was more than offset by increases in network charges and government green schemes. We decided to absorb these costs to make sure our residential customers in Victoria don’t pay more in 2019,” said Executive General Manager Retail, Jon Briskin.
“Origin is taking clear action to assist customers, particularly those most in need of support, but it is time to look for more substantial reductions across the energy supply chain consistent with the ACCC’s recommendations. The need for coordinated climate and energy policy that can guide the transition to a low carbon future at least cost to the community must also remain an urgent priority.”
EnergyAustralia also flagged rising supply-chain costs in its statement on keeping electricity prices on hold.
“Had EnergyAustralia not paid to keep prices flat, the retailer’s average household customer in Victoria would have faced a 1.9 per cent or $39 increase in their annual electricity bill for 2019,” it said.
“While the cost of buying electricity for next year on behalf of customers (wholesale electricity) decreased, these savings were cancelled-out by an increase in the cost of government green schemes, regulatory-approved network tariffs and Victorian government regulatory costs.”
EnergyAustralia also said its increase in gas prices for 2019 reflects the higher cost of buying and transporting gas due to restricted supply in Australia’s east-coast market, but that customers can avoid the price hike by switching to its fixed rate Secure Saver plan, with rates locked in for two years.
Origin will automatically drop electricity prices for concession customers on standing offers or non-discounted plans in NSW, ACT, SA and Qld by 10% on 1 January as we continue to make sure our most vulnerable customers get price relief. https://t.co/jP9BYmJu1B pic.twitter.com/Z163KGUCG7
— Origin (@originenergy) November 29, 2018
Additional savings for some standard contract customers
In addition to announcing their electricity and natural gas prices for Victoria, AGL, Origin and EnergyAustralia have all revealed plans to reduce costs for some standard contract customers across Australia through guaranteed discounts.
AGL will provide automatic discounts of up to 10% for electricity customers who have been on standing offers for more than a year.
The retailer says the new discounts will be applied to more than 150,000 households, who will see savings of between $50 and $180 off standard prices. Customers in Victoria appear set to benefit the most, with a discount of 10% applied to electricity usage and supply charges from January. Customers in New South Wales will get 10% off usage charges, while those in South Australia will get a 7% discount and those in Queensland 5%.
Meanwhile Origin will provide an automatic 10% discount on electricity usage charges for all concession card customers on standing offers and non-discounted plans in New South Wales, ACT, Queensland and South Australia from January. The retailer said the move will see more than 230,000 customers save an average of $169 per year off its standing offer rates.
In Victoria, Origin will continue the offer introduced last year, providing discounts of 26% to concession card holders and 17% to customers on standing offers or non-discounted plans.
EnergyAustralia has also revealed plans to cut the power bills of concession card holders on its most expensive tariffs through automatic discounts.
The retailer says that eligible customers on default or standing offer contracts will receive 15% off electricity and natural gas usage charges, regardless of where they live.
The ongoing discount will be applied from January and will mean that eligible customers paying the highest prices will save an average of $270 a year on their electricity usage and $145 on gas, the retailer says.
The discounts will apply to customers in Victoria, South Australia, New South Wales and Queensland, bringing savings of between $195 and $270 a year for average households.
Alinta Energy has also announced plans to give standard contract customers its best guaranteed discounts in each state. This would mean savings of up to 35% off electricity usage charges.