Household electricity prices to fall as much as 10%

Households could start to feel relief from rising electricity bills within months as authorities move to cut prices on the eastern seaboard by as much as 10 per cent, potentially wiping off hundreds of dollars a year for some customers.

In welcome news for households battling mounting cost-of-living stresses, the Australian Energy Regulator on Thursday said it intended to reduce the maximum price retailers can charge customers on standard electricity plans, known as default market offers, from July 1.

The proposed reductions, which range from 1.3 per cent ($31 a year) in South Australia, to 10.1 per cent ($216) in parts of NSW, are the steepest since 2022, when Russia’s invasion of Ukraine pushed up the cost of coal and natural gas and triggered double-digit power bill hikes.

Consumers in all eastern states stand to benefit from lower retail power prices, Australian Energy Regulator chair Clare Savage said.

The changes will directly affect hundreds of thousands of consumers who do not take up special deals, but also act as a reference point for electricity retailers, such as AGL, Origin and EnergyAustralia, as they assess their next pricing cycles across their wider customer bases.

“This draft decision points to the potential for some welcome relief for households and small businesses after several years of rising energy costs,” she said.

The regulator attributed the reductions mostly to sharp falls in wholesale electricity costs – what retailers pay generators for power before supplying customers – following a period of record-breaking contributions from renewable energy and large-scale batteries, which lowered the need to call on expensive gas-burning power stations to plug supply gaps.

This year’s “default market offers” will have added significance for household budgets after the Albanese government announced in December it would end its $75-a-quarter energy bill rebates.