July 1 Power Price Changes: What it means for you
There are big changes coming to the way electricity is charged in NSW and Queensland on July 1, and how it affects you will all depend on where you are and what sort of customer you are.
Both states will deregulate electricity prices, as Victoria did in 2009 and South Australia did this year. That means no more government price caps and a competitive free-for-all where retailers have more leeway to differentiate their products to attract customers.
Here’s our brief rundown of what it could mean for you:
If you’re in NSW, and you’re paying the regulated tariff:
There will no longer be a regulated tariff after July 1, 2104. In other words, prices will no longer be capped and retailers will be free to raise them. It’s very important that you don’t just keep paying your bills without checking whether you can save by signing up to a market offer.
Some market offers, such as the FiftyUp Club’s offers with Click Energy, now have no exit fees or lock-in periods, and feature big discounts off the standard rates that are paid by those who don’t take up a market offer. So it will pay to shop around, even more so than before.
If you’re in NSW, and you’re on a discounted market contract:
Your contract with your retailer will remain in place, but once it expires, you will have fewer protections.
You could be reverted to a lower discount or to a “standard contract” with no discount if you’re not paying attention – as this story demonstrated this week. Deregulation means no more price caps, so in the worst case scenario, the deal you are moved onto could be even worse than the regulated tariff today.
The good news is that deregulation often produces greater competition and bigger discounts for customers how do shop around. In fully-deregulated Victoria, for example, there are more electricity retailers and bigger discounts than any other state in Australia.
If you’re in South-East Queensland:
Power prices in South-East Queensland will also be deregulated from July 1, as we learned on Wednesday night.
Once again, this means there will no longer be a regulated tariff, and prices will no longer be capped, and retailers will be free to raise them above where they are at present.
But experience in Victoria, which is fully deregulated, shows they will also compete harder by offering bigger discounts. So be one of the smarter customers and take advantage of the change: get on a good market offer and shop around from time to time.
If you’re in South-East Queensland, and you’re a solar customer:
Solar customers will no longer get their 8c feed-in from the state government from July 1, under new laws passed by the parliament on Wednesday night. The Newman government says this will save electricity consumers more than $100 million in cross-subsidies and help keep power prices lower.
But the change will affect almost 40,000 Queensland households, but the 284,000 who signed up early enough to get the 44c feed-in tariff will be unaffected. For the unlucky 40,000, it will now be vital to shop around for a retailer that offers a good feed-in tariff, such as the 10c/kWh offered by Click Energy in the FiftyUp Club’s special offer.
If you’re in North Queensland:
Households in the Ergon Energy zone will still have only one retailer to choose from, and will therefore remain regulated after July 1.
Solar customers will not lose their government feed-in tariff like in the South-East of the state, but they will receive a different feed-in tariff set by the Queensland Competition Authority after July 1.
In Summary:
Deregulation rewards smart consumers. If you shop around and you’re prepared to move, you could be better off. But it can also make things more confusing and more expensive for consumers who don’t or can’t look after themselves, so if you have a family member or friend who’s in this category, be sure to look out for them.
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Joel Gibson is the Director of Campaigns at the FiftyUp Club
