Australian Energy Regulator announces power bill change in several Australia states

As the cost of living continues to be a pressing concern for many Australians, forms of financial relief are always welcome—may it be discounts, deals, or price cuts.

A recent announcement from the Australian Energy Regulator (AER) is a breath of fresh air—especially for those in Australia’s southeast states.


Starting from July 1, households across Australia's southeastern states can expect a significant reduction in their power bills, thanks to a cut in electricity price caps and the introduction of government energy rebates.

The AER's final default market offer (DMO)—a price ceiling to protect consumers from overpaying—has been revised, which resulted in lowered maximum charges that electricity retailers can impose on households.


compressed-electricity.jpeg
The Australian Energy Regulator announced a significant price cut for several states in southeastern Australia. Image Credit: Pexels/Pok Rie


In New South Wales, the cap will be reduced by up to $28, bringing the maximum amount down to $2499. Meanwhile in South Australia, the reduction is even more substantial at $63, with a new cap of $2216.

These figures don't factor in yet the household electricity rebate announced in the federal budget—meaning bills will be further reduced by an additional $300.

This is a significant saving that will undoubtedly help ease the financial burden for many.


Despite an increase in the default offer by up to $83 to $2052 for the next financial year, southeastern Queensland residents will not feel the pinch thanks to the federal government's rebate—coupled with a generous $1000 subsidy from the Labor state government.

Meanwhile, Victorians will enjoy a price fall of up to 5.7 per cent—$100 to $1655 before the $300 rebate is applied.

It's important to note that while only between eight and 12 per cent of households are signed up to the default market offer—almost 500,000 customers in total—the impact of the DMO extends beyond these figures.


Estimated average household energy bill under 2024-25 DMO (1).jpg
The AER revealed possible price cuts under the 2024-2025 DMO. Sources: Australian Energy Regulator, Victorian Essential Services Commission


Major retailers like Origin Energy and AGL use the state-specific caps as a benchmark for setting prices for the rest of their customers.

These benchmarks can start a ripple effect that will be felt across the market.

The rationale behind the reduction in the DMO is attributed to an easing in wholesale prices—the cost at which retailers purchase electricity before selling it to consumers.


However, this has been balanced with a rise in network costs, covering the maintenance of poles and wires infrastructure.

Despite this, the AER managed to keep customer prices from increasing by reducing the allowable margins for power companies.

While the moderation in default prices is a welcome development, Ben Barnes, Acting Chief Executive of the Australian Energy Council, cautioned that it could reduce competition in the sector and potentially limit retailers’s ability to offer discounts.

The future setting of the DMO will be crucial for maintaining industry confidence and enabling retailers to provide cheaper market offers.

With these changes in mind, AER Chair Clare Savage encouraged consumers to actively seek out better electricity deals.

'Most retailers have cheaper deals than the standing offer, so shopping around remains the best way to get the best price,' she advised.


Energy Minister Chris Bowen welcomed the AER's final offer and highlighted the government's investments in energy as instrumental in lowering household bills.

'Today's figures show a welcome downward trend for prices, but we know there's more to do—which is why we're delivering our reliable renewables plan and providing direct energy relief for every household energy bill,' he stated.

As we navigate the challenges of rising household expenses, these reductions offer a much-needed reprieve.

It's a reminder of the importance of staying informed about changes in the energy market and taking advantage of rebates and subsidies when they become available.

After all, a penny saved is a penny earned, and in this case, the savings could be substantial.
Key Takeaways

  • The Australian Energy Regulator announced lower price caps to reduce power bills in Australia's southeastern states starting July 1.
  • Households in NSW, South Australia, and Victoria will see their electricity bills decrease due to these lower price caps and government rebates.
  • The default market offer will also affect more households as it serves as a benchmark for major retailers to set prices for their customers.
  • Despite cost reductions in the default market offer, the energy industry warned that it could reduce competition and limit retailers' ability to offer discounts.
Have you experienced a reduction in your power bills recently, or do you have tips for fellow seniors on how to manage energy costs? Share your thoughts and advice in the comments below.
 
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By your reasoning Prime Minister Joseph Cook was responsible for WWI and Prime Ministers Frank Forde was responsible for WWII.

They were the incumbents at the time.
History is history.
 
Still waiting for the $275 from Albo. The $300 is a sweetener for the next election . Nothing there for WA.
 
Guess what West Australia is part of this country too & we get a state subsidy as well.
 
Nothing to do with the government. People were still travelling, the virus was here before anyone knew.
What was to do with the gov't of day was that there was no coordinated plan to deal with the problem. Morrison was Hillsonging in mid-March with the then Chief Medical Officer still making utterly useless blandishments.

The virus was known internationally as a potential problem by late January 2020. Vietnam, a country with 98 million people in 4.54 times the area of Tasmania certainly took effective early action. Yes, it was a very difficult problem to deal with and all but the Liberal State of NSW did a reasonable job. But human nature is hard to deny in the long run, as is the need to earn money etc. The question to be addressed now is could we have done better? Loony tune anti-vaxxers are part of that problem despite the proved efficacy of past vaccination campaigns. Has Australia yet produced its own anti-viral pills for C-19 and its own C19 vaccinations? If not, why not? We have excellent biomedical research institutes that one hopes our Federal government sees fit to fund for such problems.

However, this is Australia and we are standing in it.
 
My $28 has "GONE WITH WIND"...... The wind blowing out of their backsides
 
the $363 rebate is less than last year for pensioners by $137
SO ONCE AGAIN PENSIONERS ARE SCREWED OVER
WHERE AS EVERY ONE NOT ON A PENSION ARE BETTER OFF BY $300 plus
LETS NOT FORGET $1500 to over $5000 in tax cuts for one person and if married or defacto or just two people living and working in the same household will be $3000 to over $10000 depending on their income
PENSIONERS .THE PEOPLE WHO WORKED ALL THEIR LIVES GET NOTHING ONCE AGAIN.
MY BUTT IS GETTING USED TO BEING SCREWED OVER SO MANY TIMES I AM A FARTING WITHOUT A SOUND
TRY PUTTING A PRICE ON THAT
 
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