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What The New Government Energy Cap Means For You And Your Electricity And Gas Bills
With Australian utility bills expected to be at least 30% more next year – the federal government has stepped in with a new, temporary energy cap.
The cap will kick in from June 2023. This is what it means for your household bills:
💰Your gas and electricity bill will be buffered by the cap but will still be more expensive than you are paying now – bills are up 20% this year.
🔍You will still have to do some legwork to make sure you are on the best energy deal for your needs and that you are getting the best price – scarily, in some states, 41% of us are paying more than we need to.
⬆️ International wholesale gas prices have gone up 600% between March and September this year, in part due to the Russia/Ukraine war, but also the world's transition to renewable power.
The takeout: energy bills are going to cost more for the foreseeable future.
Is the federal government energy cap good news?
Compare Club's Utilities General Manager Paul Coughran says households who are struggling with the cost of living should really benefit from the new price cap.
We're expecting to see energy retailers launch competitive offers as they look to sign up more customers.
That gives households more choice and should help them save big by shopping around.
It's win-win for both retailers and customers and should help those households who are proactive enough to shop around for a better deal.
The $1.5bn in federal support is very good news for those lower socio-economic households who've been struggling with their energy bills, as it will offset the increase to the Default Market Offer and the Victorian Default Offer.
The only losers here at this stage are the gas and coal wholesalers and people who don't look for a better deal on their energy.
That said, this cap is only in place for 12 months, which isn't long enough, but it's better than nothing and allows a lot of households who've been hit in the wallet from all angles by inflation to get a little bit of respite on their energy costs.
The bottom line
This is really good news for consumers who have been doing it tough on their utility bills.
The mandatory code of conduct that the Government is bringing in will help customers get fairer pricing too.
🧮 It will also reduce the expected 36% electricity hike down to 23% – better but still something to budget for.
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