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Every July, the energy regulator bigwigs conduct a thorough review of the key costs that make up the energy supply chain. Based on their review, the standing offer for energy is adjusted.
We’d love to bring down the prices for you, but sometimes market conditions throw a curveball, resulting in price increases. That’s the case again in 2023 and we’ll explain why this is happening.
The impact of these changes on your bill depends on factors like your usage, network region, and whether you have solar panels.
Let’s talk about the main factors that contribute to changes in energy prices:
Distribution and wholesale costs make up the majority of an average electricity bill.
While annual price changes are an unavoidable part of our industry, our team has worked hard to limit price rises as far as possible within the environment of much higher wholesale prices.
Please remember that our monthly membership is how we cover our running costs, which means you benefit from energy rates at the price we buy them. We’re here to help you save on your power usage as it doesn’t impact our bottom line and reckon this is the fairest and most transparent way to pay for such an essential service.
We also only change our prices once a year so you can rest easy knowing there will be no hiking of prices later from us for a profit grab.
Based on the data we see in the market, it doesn’t look like the current high wholesale power prices will reduce anytime soon. The one exception is in Victoria where prices for the following year have started to reduce a bit. When we start purchasing energy for the subsequent financial year, if we can get it cheaper then we will pass on those savings to our customers during our next reprice.
Speaking frankly, Australia has meandered along without a coherent national energy policy for too long. It’s not surprising that coal power stations are breaking down: the owners of them had little incentive to keep upgrading them without long-term policy uncertainty.
However, rising coal and gas prices – which feed into higher wholesale electricity prices given they’re still used for the majority of generation – could and should have been avoided. The government eventually announced price caps, but they’ve not been sufficient to avoid nasty price increases this year. Companies that have access to heaps of coal and gas but still opportunistically pass though significant customer price increases while also announcing increased profit outlooks (yes, we’re talking about you Origin and AGL) should be ashamed of themselves.
Other things that we believe will help include:
So, I’m sorry that this is another year of a horrible price increase. It shouldn’t have to be this way and we’ll keep doing whatever we can to push for better outcomes for customers. If we can help you in any way, please contact our Australia-based team and we’ll do our best to assist.
Founder, Energy Locals