Red Energy cuts electricity rates, but gas prices go up

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Red Energy has cut or frozen electricity prices across the country, but customers can expect to pay more for gas.

The retailer, owned by renewable energy generation company Snowy Hydro, says its electricity rates in Queensland will drop by 2.2%, resulting in average savings of about $36 a year.

In South Australia, electricity prices will come down by 1.5%, meaning average savings of about $32.

However, the news is not so positive for Red Energy customers in New South Wales where electricity rates will remain the same and natural gas prices will go up by 1.8%.

Gas prices will also increase in South Australia by 2.5%.

The retailer has blamed an increase in network costs for not reducing standard electricity prices in NSW, but did not provide any explanation for the increase in gas rates in NSW and SA.

“Red Energy’s electricity standing offer has been put on hold as the business absorbs a $5.7 million increase in network and green scheme costs, in the expectation of continued falls in wholesale energy costs over the next few years,” Red Energy said in a statement on its website.

Iain Graham, CEO of Red Energy, said the reduction in wholesale energy prices has been achieved with new renewable energy coming online.

“Red Energy is a major buyer of wholesale energy from Origin, AGL and Energy Australia. The reduction in prices is a welcome relief for customers as Red Energy is able to pass on those savings despite rising network and green costs,” he said.

“We welcome competition and encourage customers to review their plans and take advantage of reduced market rates.”

Red Energy is one of several retailers to announce a cut to electricity prices in Queensland, with AGL (1.6%), Origin Energy (1.3%), EnergyAustralia (3.8%) and Simply Energy (5.4%) also revealing their revised prices in recent weeks, with others expected to follow suit in cutting costs from July 1.

It’s been a similar story in South Australia with retailers announcing modest price reductions, but in New South Wales most companies have so far frozen electricity rates or dropped them by less than 1%.

However, gas prices have generally gone up or remained frozen in most areas.

In addition to cuts to residential electricity prices, small business customers with Red Energy in Queensland can expect prices to come down by 4.3%, with rates cuts by 2% in South Australia and frozen in NSW. Gas prices are going up by 2% in NSW.

Could your retailer be doing better?

While most electricity retailers have so far announced modest price cuts in Queensland and South Australia, you would be forgiven for feeling a little underwhelmed by the savings. And households in New South Wales must be wondering what they have done wrong to avoid price reductions from most suppliers.

While price reductions of any kind reflect a move in the right direction, you may be able to save more by negotiating an improved deal with your existing provider or switching to a new deal.

Canstar Blue Editor Simon Downes said: “It’s important not to assume that the retailers announcing the biggest price cuts now will be your cheapest bet going forward, because retailers are not reducing costs from the same starting point.

“We have been expecting electricity prices to come down and unless your retailer has announced a significant change, it could be time to review your options and see if you could be getting a better deal elsewhere.

“While we’re not seeing the drastic price increases of last July, we’re all still paying a very high price and should be trying to achieve savings wherever possible.”

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