Electricity users in the Australian capital’s territory will see average electricity costs fall by at least 1.25 per cent on July 1, as the capital’s extensive contracts for the Australian capital 100 per cent renewable electricity protects its consumers from the chaos that pervades Australia’s energy markets.
On Monday, the ACT’s Independent Competition and Regulation Commission, which regulates electricity tariffs in the ACT, announced that regulated tariffs provided by government-owned retailer ActewAGL would fall next year.
Both households and businesses in Canberra will benefit from lower electricity costs, even when consumers in most other states face bill increases of up to 18 percent or more.
“The minimum average decrease of 1.25 percent will result in a $ 23 annual bill savings for an average residential customer consuming 6,500 kWh,” said ACT ICRC chief commissioner Joe Dimasi. in a statement.
“For an average non-residential customer consuming 25,000 kWh, the annual bill decrease will be $ 88.”
The ICRC says the ACT will become the only jurisdiction in Australia to enjoy lower electricity prices, potentially the lowest in Australia, during a period of intense disruption and rising oil and gas costs. and coal.
“ACT is the only jurisdiction in the national electricity market where regulated tariffs will decrease in 2022-23,” he said.
“The average annual bill for Canberrans on permanent bids will be the lowest compared to the average permanent bid bills facing customers in New South Wales, Victoria, Queensland and South Australia.” .
The ICRC said the drop was mainly due to fixed-price contracts signed by the ACT government to obtain the equivalent of 100% of the territory’s electricity consumption from renewable energy sources.
“The reduction in prices is driven by the reduction in the costs of the ACT government scheme, which more than offset the increase in wholesale electricity costs. ACT The costs of the government scheme go lower prices this year, “said the ICRC.
“The costs of the ACT government scheme fell due to a drop in large-scale support tariff payments (FiT). The payment of large-scale FiT support is the difference between the fixed price of the contract for renewable generators and wholesale electricity prices, “says the ICRC.
“Due to an increase in wholesale electricity prices, contract payments for difference to contracted generators decreased.”
The ICRC noted that the reduction in the price of electricity would be applied to consumers at the regulated rates provided by ActewAGL, which has a market share of more than 80% in the ACT, and encouraged energy users to check to make sure they get the best deal on your electricity. retailer.
“The above-mentioned regulated price reductions only apply to permanent supply rates. We encourage consumers to regularly compare these rates with other offers on the market,” Dimasi added.
How the prices of ACT electricity will change
ACT Minister for Energy and Emission Reduction Shane Rattenbury welcomed both falling prices and emissions, while encouraging ACT households to continue to adopt energy efficiency schemes offered by the government.
“We are very pleased to see that ACT’s energy prices are among the most affordable in the country, while helping us move to 100% renewable electricity and reduce our greenhouse gas emissions. about 40%, ”Rattenbury said.
“That being said, we encourage the people of Canberra to continue to take on the available programs of the ACT government.”
“There are a number of programs to get away from some of the fossil fuel devices in your home to install solar, to boost energy efficiency so that we can continue to make sure the energy is affordable for in homes here at ACT “.
Source: ICRC ACT.
As RenewEconomy reported last week, ACT has secured fixed-price electricity contracts as part of its commitment to supply 100 percent renewable electricity throughout the territory.
Under the Renewable Energy Policy, ACT signed contracts for difference with a number of solar and wind farms, which makes ACT pay no more and no less than about $ 90 per megawatt-hour for electricity. Wholesale.
Because wind and solar projects have no fuel costs, they are not subject to the same cost fluctuations that coal and gas generators can experience and can therefore offer wholesale fixed price contracts.
Contracts by difference see that ACT energy users supplement payments to contracted wind and solar projects when wholesale electricity prices are lower than the fixed contract price, but when wholesale electricity prices are lower. exceed the price of the fixed-term contract, wind and solar projects must reimburse the excess to consumers.
While it typically sees ACT households paying a small premium for their renewable electricity supplies, the contracts also protect consumers from any increase in wholesale prices, such as those currently affecting the Australian electricity markets.
New South Wales wholesale electricity prices averaged $ 320 per MWh in May and are currently surpassing $ 475 per MWh on average in June.
Although these high prices have contributed to rising electricity prices in other jurisdictions, especially in New South Wales, South Australia and South East Queensland, which have seen their electricity rates rise. reference electricity by the Australian energy regulator, ACT electricity users will see their costs. autumn, thanks almost entirely to renewable energy contracts.
The ICRC found that ACT consumers would also benefit from lower transmission and distribution costs, contributing 0.74% to the overall reduction, while retailers’ margins were also slightly lower.
Shortly after the federal election, the AER released its latest “default market supply” determination, setting the price of electricity for consumers in New South Wales, south-east Queensland. and South Australia.
The determination found that the reference price for electricity in New South Wales rose by 8.5% to 14.1%, 11.3% in south-east Queensland and 7.2%. in South Australia.
The AER said these increases had been caused by higher costs of coal and gas generation and the impacts of an increase in the frequency of outages in large thermal generators.
Michael Mazengarb is a Sydney-based RenewEconomy reporter who writes on climate change, clean energy, electric vehicles and politics. Prior to joining RenewEconomy, Michael worked in climate and energy policy for more than a decade.