Energy Rates From July 1 2024: Everything You Need To Know
- In short: From July 1, energy companies are expected to reduce standard rates by up to 9.7%
- However, certain areas are anticipated to see an increase in prices – these are forecast to remain lower than the inflation rate of 3.4%.
- What’s next? The recent rebound in the energy market may result in increased competition among energy providers, leading to more valuable consumer offers.
- Recommendations: Compare energy rates using reputable energy comparison tools.
What’s happening from July 1, 2024, for utilities in Australia?
From July 1, 2024, regulators such as the Australian Energy Regulator (AER) and Victoria’s Essential Services Commission (ESC) expect power companies to reduce standard rates by up to 9.7% (1).
These regulatory bodies have issued draft changes to power retailers, directing them to reduce default rates by up to 9.7% from July 1, 2024. The regulators aim? Address the rising electricity costs squeeze experienced by households. However, the draft is still open for public consultation and could undergo adjustments before final determinations in May, 2024 (1).
What is the Default Market Offer (DMO)?
“The DMO sets a price cap on how much energy retailers can charge electricity consumers on default plans. This helps consumers who don’t, or can’t shop around for a new electricity deal” (2). It is reported that 10% of households and small businesses who don’t search for better deals end up paying these default rates (1).
Who does this impact?
Consumers are forecast to see a decrease of up to 9.7%, while others could see a slight increase of up to 2.7% (albeit lower than the annual inflation rate of 3.4%).
According to the proposal, the average annual household electricity bills for residential customers without a controlled load on the DMO are expected to decrease as follows:
- NSW Ausgrid distribution network (Sydney/Newcastle/Hunter Valley region), bills could decrease by $54 (3%);
- NSW Endeavour distribution network (Wollongong/Lithgow down to Ulladulla), bills could decrease by $43 (1.9%);
- South Australia’s SA Power Networks distribution network (South Australia), bills could decrease by $57 (2.5%) (9).
However, in certain parts of NSW and south-east QLD, residential customers without a controlled load on the DMO are expected to see year-on-year increases:
- NSW Essential distribution network (the rest of NSW), bills are predicted to increase by $22 (0.9%);
- QLD Energex distribution network (south-east QLD), bills are predicted to increase by $53 (2.7%) (9).
Why are some regions getting a decrease in energy costs, and some are getting increases in energy costs?
Recent data shows that wholesale electricity prices in the National Electricity Market have declined by approximately 50% compared to the previous year in varying regions (1, 3). It is encouraging to observe that energy regulators are passing on these reductions to consumers.
However, it’s important to note that wholesale prices constitute just one factor in determining energy bills (4). Distribution costs, environmental costs, retail costs, and network costs also play significant roles in setting default prices. This is why there are some small increases in areas, while other areas are seeing a decrease in costs.
What does all of this mean for me?
The recent rebound in the energy market has resulted in increased competition among energy providers, leading to more valuable consumer offers. This highlights the importance of actively comparing electricity plans on a regular basis, regardless of anticipated price reductions coming into effect from 1 July.
On the other hand, the Australian Energy Council suggests that decreasing the default rates could prompt retailers to “cut back on their most generous discounts as they seek to recoup the revenue lost from customers on standing offers paying the DMO” (1).
By staying informed and exploring available options, consumers can take advantage of the best deals and potentially find the cheapest electricity rates. Frequent comparison ensures that consumers are getting the most value for their money and can adapt to changing market conditions effectively.
Cheapest electricity rates
Compare Energy Plans Today
Sniip’s Switch & Save energy comparison service is an extensive online platform designed for comparing energy plans across various providers. Simply input your details and preferences to access a curated list of plans tailored to your needs, taking into account factors like rates, contract terms, and additional features.
Tips for finding the cheapest electricity rates in your area
Electricity: Find Cheaper Price
Energy comparison tools are designed to facilitate the comparison of different power plans, enabling consumers to find the cheapest electricity rates.
However, not all comparison tools will offer you the genuine best plans for your needs. Below are some important factors to consider when using an energy comparison tool:
Reliability and Trustworthiness: Choose a comparison tool that is reputable and trustworthy. Some energy comparison tools may have sponsorship or partnerships with specific energy providers. These could potentially influence the way certain plans are promoted or displayed.
Coverage and Options: Opt for a tool that covers a wide range of energy providers and plans in your area.
Transparency and Ease of Use: The comparison tool should be transparent about how it operates and how it generates recommendations. Additionally, the tool should be user-friendly, allowing you to easily input your details and receive results instantly.
The most popular energy comparison tools in Australia
Compare The Market
Compare The Market is one of Australia’s most well known comparison tools. It is a price comparison website and online platform that allows consumers to compare various financial and insurance products, including energy plans. The website operates by providing users with a way to input their specific requirements and preferences, such as location, energy usage, or coverage needs, and then presents a list of available options from different providers.
iSelect
iSelect is an Australian comparison service that helps consumers compare and choose from a range of products and services, including electricity and gas plans. It operates a platform where consumers can compare different options from various providers.
Compare energy plans: Australia’s energy comparison tool you can trust
Searching to compare electricity rates?
Sniip’s Switch & Save energy comparison service is a comprehensive online platform that allows you to compare energy plans from multiple providers.
By entering your details and preferences, you can view a list of plans from a panel of providers that may match your needs. The technology considers various factors such as rates, contract length, and add-ons to provide a range of suitable options.
Cheapest electricity rates
- No sponsored links or products
- No third-party sites
- No fuss
Switch & Save does not favour any particular provider or product, ensuring you get a transparent and fair comparison.
Switch & Save is currently available in the following states and territories:
- New South Wales
- Australian Capital Territory
- South Australia
- Victoria
- Queensland (certain areas, gas only)
- Tasmania (certain areas, gas only)
- Western Australia (certain areas, gas only)
The comparison tool is not available for Ergon Areas in Queensland, the Northern Territory, and embedded networks or non-quotable metres.
What is Sniip?
The Sniip app is a Brisbane-based bill-payment app empowering both individuals and businesses to pay bills using any payment method. Sniip allows consumers to make payments their way, without needing to log into multiple banking or bill platforms.
When you pay an energy or gas bill through the Sniip app, if there is an opportunity to compare your current provider to alternatives in your area you’ll see a friendly pop-up appear. Or, you can access the ‘Switch & Save’ tool here. Or, learn more about Switch & Save here.
What caused energy prices to get so expensive?
The electricity price increase in 2023
In 2023, a lot of consumers were wondering, ‘Why have electricity prices increased’ and ‘How much has electricity gone up in the last 12 months?’
From July 1 2023, the Australia Energy Regulator (AER) highlighted that “residential customers on standard retail plans will see price increases of 20.8% to 23.9% without controlled load, depending on their region, and between 19.6% to 24.9% with controlled load, depending on their region” (7). The Global Energy Crisis has been a key contributor to the upwards pressure on energy bills (8).
Explained by the International Energy Agency, energy markets started to tighten in 2021 for a range of factors, including the rapid economic resurgence following the COVID-19 pandemic (8). However, the situation intensified into a severe global energy crisis following Russia’s invasion of Ukraine in February 2022 (8). Natural gas prices surged to unprecedented levels, consequently driving up electricity prices in certain markets. Oil prices soared to their highest point since 2008.
Searching for the cheapest electricity rates?
Summary
Overall, the upcoming changes in power prices across Australia from July 1, 2024, represent a mixed scenario for consumers. While many households are expected to benefit from reduced standard rates of up to 9.7%, others may face slight increases in their electricity bills, though still below the annual inflation rate. These adjustments are being mandated by regulatory bodies like the Australian Energy Regulator (AER) and Victoria’s Essential Services Commission (ESC) to address the growing costs of electricity and provide relief to most customers.
It’s essential for consumers to stay informed about these changes and consider their impact on their electricity bills. The recent market rebound has led to increased competition among energy providers, resulting in more competitive consumer offers. This emphasises the importance of actively comparing electricity plans regularly, regardless of anticipated price decreases from 1 July. By exploring available options and using reliable comparison tools, consumers can maximise savings and ensure they are getting the best value for their money in this evolving energy market landscape.