Victorian households will start paying an average of 9.3 per cent more for their electricity from Thursday, January 1 – the day electricity pricing deregulation is introduced to the state.
The result will be an annual increase in the average household electricity bill of around $109, according to Mr Shaun Johnson, CEO of the independent energy price comparison service, Switchwise.com.au.
Mr Johnson says the new year will see the introduction of full pricing deregulation in Victoria, making it the first state in Australia to allow energy retailers to set their own prices.
“While this will likely spur product innovation and greater consumer choice, the Essential Services Commission has warned retailers against excessive price rises and most retailers have responded accordingly,” he says.
Major Changes to Electricity Pricing in Victoria:
- Electricity price rises will range from zero to 33 per cent across energy retailers, with the majority keeping increases under 10 per cent.
- Energy Australia is the only retailer to not yet increase its prices from 2008, which might indicate a desire to aggressively acquire new customers.
- Momentum Energy will post the greatest increase (33 per cent) although it has few residential customers, having sold them to Australian Power & Gas in July, 2007.
- Among the major providers, TRUenergy will increase its prices the least (5.3 per cent) while Origin and AGL’s price hikes will be 9.2 per cent and 9.8 per cent respectively.
Mr Johnson says that while deregulation will undoubtedly lead to ongoing price increases, ultimately it should benefit consumers in terms of new products and services.
“Australian consumers have benefited from artificially low electricity and gas prices for a long time so to ensure security of supply there is only one direction in which prices are likely to head over the coming years. Now more than ever it is important for consumers to examine their current electricity and gas supply arrangements.”