Victorian Electricity Price Hike, Other States Likely To Follow

WA residents have already received bad news on electricity prices, Victorians have now as well and the fate of other states may be revealed today.

Last week we mentioned regulated electricity prices in Western Australia were set to rise, which will see the McGowan Government clawing back some of its recently announced Household Electricity Credit. The increases aren’t huge, but WA residents and business have been subjected to a bunch of them in recent years.

In Victoria, the Essential Services Commission announced on Tuesday it had set the Victorian Default Offer prices to apply from 1 July 2022 to 30 June 2023. In short, average annual bills for households and small businesses on the default (standing) electricity market offer will increase by around 5 per cent; although impact will vary depending on the distribution area – for some the increase will be less, for others more.

Standing offers are arrangements electricity retailers must make available to domestic and small business customers who don’t take up a market offer. It also applies to the estimated 140,000 customers in embedded networks, such as apartment buildings, who often don’t have retailer choice. In that scenario, it’s the maximum rates that can be charged for supply and usage.

Electricity retailers must show the price of their market offers in comparison to the default, helping consumers to compare electricity plans. While standing offer customers are a minority, the offer sets the scene for all others.

The main reason for the increases:

“Forecast wholesale electricity prices are driving an underlying increase,” said Essential Services Commission pricing director, Marcus Crudden. “Rising wholesale prices for electricity account for almost two thirds of the increase in the default offer for households.”

For solar power system owners, increases in wholesale electricity prices usually mean an increase in feed-in tariffs, but the timing has been bad. The minimum Victorian feed-in tariff rate for 2022–23 was set on February 24 this year. This was just a couple of days before the poop really hit the proverbial in Ukraine – which is one of the factors in the increase as the situation drove up the cost of fossil fuels. Clapped-out coal fired clunkers failing or exploding haven’t helped.

Awaiting The Australian Energy Regulator

For those in South Australia, New South Wales and south-east Queensland, keep an eye on what the Australian Energy Regulator has to say soon – possibly today. The Regulator will be announcing how the Default Market Offer will look for 2022-23. And rumblings are that it could look pretty ugly.

UPDATE 10:15AM: The Regulator has determined  residential default market offers will jump between 8.5% and 18.3% in New South Wales, 11.3% to 12.6% in south-east Queensland and 7.2% to 9.5% in South Australia. There are big increases for small business too.

Don’t Blame PM Albo (Yet)

If there is carnage, no doubt there will be howling that Labor is to blame and there will be calls for freshly-minted PM Anthony Albanese’s head. But any increase will have already been baked in.

And here’s an interesting thing.

Usually the AER releases Default Market Offer details on May 1. But supposedly it was put off until after the election to give the Regulator more time to crunch the numbers. Some suspicious folks may believe doing this was to enable the then-Morrison Government to continue claiming it had done great things with electricity pricing as part of its effort to get back over the line, but also leaving a nasty mess for Labor to explain if Albo bested ScoMo.

This would be a devious thing to do, but pretty clever.

However, the man who was Minister for Industry, Energy and Emissions Reduction until this week – Angus Taylor – reportedly denies such deviousness and we’ll just have to take him at his word I guess.

If on top of every other crappy thing that has happened in recent years you’re now absolutely sick to death of padding the pockets of electricity retailers, you certainly wouldn’t be alone. But in the words of the great philosophers Aerosmith – don’t get mad, get even. Get solar panels installed.

Original Source: https://www.solarquotes.com.au/blog/electricity-prices-regulator-mb2489/