Households on standard electricity contracts face a price hike of 17 per cent in the coming financial year, the ACT's electricity market regulator has said.
But the Independent Competition and Regulatory Commission expected ACT customers on standing electricity offers would still have some of the lowest bills in Australia and expressed reservations about its own price rise estimates.
The commission on Monday released its draft report on regulated electricity prices over the next three years, which includes proposed changes to the way the commission sets electricity prices.
Joe Dimasi, a senior commissioner at the Independent Competition and Regulatory Commission, said the proposed changes would more accurately reflect the costs incurred by electricity retailers and would balance delivering reasonable prices and competition in the market.
"Despite the indicative increase in regulated electricity prices, we expect the average bill for Canberrans on standing offers will be lower than average standing offer bills in Victoria, NSW, South Australia and Queensland," Mr Dimasi said.
The commission said it had a "low confidence" in the estimated figure of a 17 per cent increase because there was still more information to consider before the final determination is made in May.
The commission said the ACT government's large-scale feed-in tariff scheme was expected to drive most of the price rise in 2024-25.
"Last year, the scheme resulted in a rebate to ACT consumers, protecting them from the large increases in electricity prices experienced in other jurisdictions. In 2024-25, the commission estimates that the scheme will incur an overall cost which will be passed on to consumers," the commission said.
The feed-in tariff scheme costs are set by the ACT government in February each year, and the commission said it would factor in this determination for its final report.
When wholesale electricity market prices are below an agreed fixed price with renewable energy generators, those generators are paid a top-up amount to meet the agreed price.
When electricity market prices are higher than the fixed contract prices, the generators earn more.
Electricity customers in the ACT could save up to $700 annually by switching from a standing offer - which is regulated by the commission - to the lowest market offer.
"Market offers tend to be much lower and our analysis shows that increased competition in the ACT can deliver substantial benefits to customers that regularly shop around for their electricity plan, including checking with other retailers," the commission said.
Canberra's electricity market had also shown signs of becoming more competitive since 2020, when the commission last considered the market, the draft report said.
The commission pointed to 17 retailers now operating in the ACT, the decline of ActewAGL's small customer market share and the drop in customers on standing offers as indicators of increased competition.
ActewAGL supplied electricity to 82 per cent of the small customer market in 2018-19, falling to 75 per cent in 2022-23.
In 2018-19, 49 per cent of residential electricity customers were on standing offers in the ACT. In 2022-23, 21 per cent of those customers were on standing offers, with market rates offered well below standing offer prices.
"Despite the limited size of the ACT electricity market there are increasing signs of competition, such as the increase in number of retailers and increase in customers on market contracts over the past 5 years. This means that the market has the potential to become more competitive and provide better outcomes for customers over time," the report said.
The draft report is open for public comment until February 29, and the commission will hold a public hearing on Wednesday, February 7 at 10am.
Chief Minister Andrew Barr and Energy Minister Shane Rattenbury said regardless of the final outcome the ACT government would seek to protect households from significant energy price hikes.
A cost-of-living subcommittee meeting in the lead up to the ACT budget would be focused on energy prices, they said.
"In recent years ACT consumers have been largely protected from the significant increase in electricity costs experienced in other jurisdictions. Last year for example, ACT residential electricity prices increased by around 4 per cent (less than inflation) while residential customers in NSW, Victoria, Queensland and South Australia faced increases of 20 per cent to 27 per cent," the pair said.
Mr Barr and Mr Rattenbury encouraged householders to regularly check electricity offers to see if they could find a better deal.
"We know that some people are already struggling to pay their bills and the ACT government continues to provide support to help these customers, including by offering an $800 concession on energy bills for eligible households," the pair said.
