By how much is your power bill going down?
If federal Treasury modelling is right, the Energy Bill Relief Fund is going to make a real difference for low-income households.AS announced on Budget night, energy bill relief is coming, and you’re going to need it. You hear increases of 25 per cent bandied around, but the detail of rising prices and bill relief are not always straightforward. Here’s how it works.
The default market offer
Every year, the Australian Energy Regulator (AER) sets the default market offer. This is the maximum price that retailers can charge electricity customers who have not opted for a (cheaper) offer.
The energy regulator does not set a single default market offer, but a series of them: one for each distribution zone in areas where there is no other electricity pricing regulation. Currently, South Australia, New South Wales and south-east Queensland have no other price regulation.
If you live in a distribution zone without other price regulation and you have found a better deal on an electricity supply contract, you are still very likely to be affected by the default market offer. Suppliers use it as a guide for when they put together better offers. In other words, if the default market offer goes up, so will the price on an electricity contract that’s better than the default market offer.
From 1 July this year, the Australian Energy Regulator increased the default market offers for the NSW distribution zone serviced by Ausgrid and Essential by 20.8 per cent. For the distribution zone serviced by Endeavour, the default market offer goes up by even more: 21.4 per cent.
The default market offer for South-east Queensland (serviced by Energex) increases by 21.5 per cent, while for South Australia, serviced by SANP, it increases by 23.9 per cent.
Default market offers don’t apply in the ACT, Tasmania, Victoria, Western Australia, the Northern Territory and Queensland (except south-east Queensland). These have separate electricity pricing regulation to protect consumers.
However, there too, note will be taken of the default market offers put together by the Australian Energy Regulator. Energy wholesalers there are subject to the same kind of demand, supply and pricing pressures as wholesalers in NSW and southeast Queensland.
How much electricity bill relief
The idea of the energy bill relief announced by the federal Government is for the states and territory to match what the federal Government puts in. Not all states and territories have agreed to that.
In NSW, Queensland, South Australia and Tasmania, the bill relief will be $500 per eligible household.
In Victoria, the bill relief will be $250 per household, plus a one off $250 direct payment through Victoria’s 2023 Power Saving Bonus Payment.
In Western Australia and the Northern Territory, the bill relief will be $350 per eligible household. In the ACT, the bill relief will be $175 per eligible household. However, these lower amounts can be justified by the fact energy bills in Western Australia, the Northern Territory and the ACT would not go up by more than 3.5 per cent without bill relief, while in the other states and territories increases ranging from 29 per cent to 51 per cent would occur.
It’s important to realise that all states and territories already operate energy bill relief schemes, providing meaningful rebates to low-income households.
Treasury modelling indicates that energy bills in all states and territories, except in Victoria and Tasmania, will be reduced in 2023/2024 compared with 2022/2023:
NSW -7%
Victoria +13%
Queensland -10%
South Australia -5%
Tasmania +10%
ACT -15%
Western Australia -14%
Northern Territory -14%
It should be noted 2022/23 has been a year of energy price increases, so that a reduction in comparison with that year doesn’t necessarily get you anywhere. But it is true that without the energy bill relief you would be a lot worse off.
Who can get it?
Anyone whose name is on the household’s electricity account and is a concession card holder qualifies. The Commonwealth Seniors Health Card is an eligible concession card for the purpose of the energy bill relief scheme.
How to get it
You don’t need to do anything right now, but you may have to do something later on, depending on where you live. Th energy bill relief package is a joint effort between the federal, state and territory governments, and each state and territory may do things a bit differently.
In most cases your electricity provider will automatically apply the bill relief to your electricity account, and this will reduce the amount you owe on your next bill.
If you already get an existing electricity bill concession in your state or territory you don’t need to do anything. You will start getting the bill relief from 1 July 2023.
If you have an eligible card or get a payment from Services Australia or the Department of Veteran Affairs (DVA), and you aren’t already eligible for help from your state or territory, you don’t need to do anything. Services Australia or the DVA will contact you in September 2023, to tell you what to do. Read more about existing schemes and eligibility.
When you will get it
If you live in NSW, Queensland, South Australia, Northern Territory or the ACT, you will get bill relief quarterly in the 2023/24 financial year.
If you live in Western Australia, you will get bill relief on your electricity bills in July and December 2023.
If you live in Tasmania, you will get bill relief on your electricity bills in the September and June quarters of the 2023/24 and 2024/25 financial years.
If you live in Victoria, you will get bill relief in installments in 2023/24.
AS announced on Budget night, energy bill relief is coming, and you’re going to need it. You hear increases of 25 per cent bandied around, but the detail of rising prices and bill relief are not always straightforward. Here’s how it works.
The default market offer
Every year, the Australian Energy Regulator (AER) sets the default market offer. This is the maximum price that retailers can charge electricity customers who have not opted for a (cheaper) offer.
The energy regulator does not set a single default market offer, but a series of them: one for each distribution zone in areas where there is no other electricity pricing regulation. Currently, South Australia, New South Wales and south-east Queensland have no other price regulation.
If you live in a distribution zone without other price regulation and you have found a better deal on an electricity supply contract, you are still very likely to be affected by the default market offer. Suppliers use it as a guide for when they put together better offers. In other words, if the default market offer goes up, so will the price on an electricity contract that’s better than the default market offer.
From 1 July this year, the Australian Energy Regulator increased the default market offers for the NSW distribution zone serviced by Ausgrid and Essential by 20.8 per cent. For the distribution zone serviced by Endeavour, the default market offer goes up by even more: 21.4 per cent.
The default market offer for South-east Queensland (serviced by Energex) increases by 21.5 per cent, while for South Australia, serviced by SANP, it increases by 23.9 per cent.
Default market offers don’t apply in the ACT, Tasmania, Victoria, Western Australia, the Northern Territory and Queensland (except south-east Queensland). These have separate electricity pricing regulation to protect consumers.
However, there too, note will be taken of the default market offers put together by the Australian Energy Regulator. Energy wholesalers there are subject to the same kind of demand, supply and pricing pressures as wholesalers in NSW and southeast Queensland.
How much electricity bill relief
The idea of the energy bill relief announced by the federal Government is for the states and territory to match what the federal Government puts in. Not all states and territories have agreed to that.
In NSW, Queensland, South Australia and Tasmania, the bill relief will be $500 per eligible household.
In Victoria, the bill relief will be $250 per household, plus a one off $250 direct payment through Victoria’s 2023 Power Saving Bonus Payment.
In Western Australia and the Northern Territory, the bill relief will be $350 per eligible household. In the ACT, the bill relief will be $175 per eligible household. However, these lower amounts can be justified by the fact energy bills in Western Australia, the Northern Territory and the ACT would not go up by more than 3.5 per cent without bill relief, while in the other states and territories increases ranging from 29 per cent to 51 per cent would occur.
It’s important to realise that all states and territories already operate energy bill relief schemes, providing meaningful rebates to low-income households.
Treasury modelling indicates that energy bills in all states and territories, except in Victoria and Tasmania, will be reduced in 2023/2024 compared with 2022/2023:
NSW -7%
Victoria +13%
Queensland -10%
South Australia -5%
Tasmania +10%
ACT -15%
Western Australia -14%
Northern Territory -14%
It should be noted 2022/23 has been a year of energy price increases, so that a reduction in comparison with that year doesn’t necessarily get you anywhere. But it is true that without the energy bill relief you would be a lot worse off.
Who can get it?
Anyone whose name is on the household’s electricity account and is a concession card holder qualifies. The Commonwealth Seniors Health Card is an eligible concession card for the purpose of the energy bill relief scheme.
How to get it
You don’t need to do anything right now, but you may have to do something later on, depending on where you live. Th energy bill relief package is a joint effort between the federal, state and territory governments, and each state and territory may do things a bit differently.
In most cases your electricity provider will automatically apply the bill relief to your electricity account, and this will reduce the amount you owe on your next bill.
If you already get an existing electricity bill concession in your state or territory you don’t need to do anything. You will start getting the bill relief from 1 July 2023.
If you have an eligible card or get a payment from Services Australia or the Department of Veteran Affairs (DVA), and you aren’t already eligible for help from your state or territory, you don’t need to do anything. Services Australia or the DVA will contact you in September 2023, to tell you what to do. Read more about existing schemes and eligibility.
When you will get it
If you live in NSW, Queensland, South Australia, Northern Territory or the ACT, you will get bill relief quarterly in the 2023/24 financial year.
If you live in Western Australia, you will get bill relief on your electricity bills in July and December 2023.
If you live in Tasmania, you will get bill relief on your electricity bills in the September and June quarters of the 2023/24 and 2024/25 financial years.
If you live in Victoria, you will get bill relief in installments in 2023/24.
