Power prices are coming down

The Hon Josh Frydenberg MP

Treasurer

Joint Media Release

22 December 2019

Residential electricity bills are coming down according to the latest Australian Competition and Consumer Commission (ACCC) Inquiry into the National Electricity Market report.

The November 2019 report found:

  • a reduction in the average residential electricity retail price across the National Electricity Market (NEM) from FY2017-18 to 2018-19 of approximately 3 per cent,
  • average annual residential electricity bills across the NEM have decreased by $65, or approximately 4 per cent,
  • the most recent annual reduction in household bills of $65 is part of a longer-term trend that has seen bills fall by $209 in real terms since 2013-14, and
  • average household bills across the NEM are at their lowest since 2013-14.    

The report provides further insight into the benefits of the Government’s Retail Electricity Code, which put in place the Default Market Offer (DMO) price safety net on 1 July 2019 in New South Wales, South Australia and South East Queensland.

The ACCC found the DMO is delivering “positive results” since coming into effect on 1 July 2019 with a significant fall in standing offer prices.

This report found that compared with residential flat rate standing offer prices prior to the introduction of the DMO, standing offer customers in NSW, SA and SE Qld could have saved between $152 and $234. And a representative small business on a standing offer in these states could have saved between $510 and $980. 

But it clearly still pays to shop around for a better deal, with the ACCC finding that switching from a standing offer to a median market offer could save residential customers between $55 and $230, depending on the region. And more substantial benefits are available to small business customers, with savings of between $720 and $1155.

Competition is also working, with smaller retailers continuing to put pressure on the Big 3, providing the best market offers in all distribution regions across the NEM.

While we welcome the positive findings of the ACCC, the Government remains committed to getting prices down and maintaining the reliability of our electricity system.

This is why we have taken action through the passage of the ‘big stick’ legislation, which complements the price safety net and provides the ACCC with real teeth to hold power companies to account for their actions in the market. We have also announced the $1 billion Grid Reliability Fund and are progressing the Underwriting New Generation Investments program, which are both designed to put downward pressure on wholesale prices and deliver a fairer deal on energy for Australian households and businesses.

Minister for Energy and Emissions Reduction