Energy Bill Shock inevitable as electricity prices in ACT rise by 18.95 per cent

Low income consumers in the ACT have today been dealt a massive blow the ACT Energy Policy Consortium said. The ACT Independent Competition and Regulatory Commission (ICRC) has announced that the regulated price of electricity will increase by 18.95 per cent in 2017-18.

For a typical Canberra household, this translates to an increase of $333 in their annual bill or about $6.40 a week. This price rise is well above inflation. It is estimated that the range of annual increases for electricity will be from $194 for households with low consumption of electricity to $471 for households with high consumption.

The ACT Energy Policy Consortium is concerned at the impact this price rise will have on low income consumers particularly those who have Centrelink payments as their only source of income or who have an insecure, irregular income from work. Around 30,000 ACT households currently receive energy concessions and/or hold a concession card. Many of these consumers have high consumption costs due to being at home all day, having medical conditions and disabilities, and having poor quality housing.

The Consortium also said that the one off payments recently announced by the Australian Government will not adequately compensate the majority of these consumers for the increase, and that the Australian Government’s initiative is poorly targeted – those on the very lowest Centrelink payments of Newstart, Youth Allowance and Austudy will not benefit. The payment will also not be available to low income consumers not eligible for a health care card.

The Consortium also expressed concerns about the impact of the price rises on small business and community organisations. In June 2015 there were 14,626 businesses with no employees in the ACT. Small non-residential customers face increases up to $522 a year and large non-residential customers facing increases of $1183. This could have significant implications for businesses operating on tight profit margins.

Community service organisations, eg aged care, early childhood education and care facilities and day treatment providers, are a significant part of the ACT economy and have limited capacity to pass on cost increases in fees or charges – indeed many of these organisations have had funding cuts. Increased electricity costs will impose a further strain on already limited budgets.

The Consortium notes that the major driving factor for the price rise are rises in wholesale costs and that these costs are outside the control of retailers. Rising wholesale costs are partly driven by the current uncertainty in the wholesale market with no clear national energy policy.

The Consortium welcomes the decision of the Commission to reduce ActewAGL Retail’s retail margin from 6.04 per cent to 5.3 per cent and also welcomes the Commission’s decision to refuse to introduce a competition allowance.

We also welcome the measures announced by ActewAGL to support customers to stay connected if they are struggling to pay their bills.

There will be increased pressure on the ACT Civil and Administrative Tribunal (ACAT) hardship assistance program and Community Organisation emergency relief programs the Consortium said.

The ACT Government has been making long-term renewable energy and energy efficiency arrangements for the Territory which will eventually result in lower electricity costs. In the meantime transitional arrangements should be in place to assist lower income people.

Assistance needs to include increasing energy concessions and industry hardship programs identifying and supporting customers unable to pay their accounts.

ACT Energy Consumer Policy Consortium members:

Media comments:

ACT Council of Social Service
0448 791 987

Conservation Council ACT Region
0419 266 110