Reduction in AGL household power costs far less than electricity analysts predicted
AGL has announced it will be cutting electricity prices across New South Wales, Queensland and South Australia from July, in response to a “record number” of customers seeking out better deals.
But the price cuts do not necessarily represent relief for consumers, because they are far less than what official market analysts had been expecting, and are accompanied by price hikes in the cost of gas.
AGL announced that, based on a weighted average, residential electricity prices would fall on July 1 by 0.3 percent in New South Wales, 1.5 percent in Queensland and 0.4 percent in SA.
In a statement, the company said the fall in electricity costs was set against rising network and green costs.
“While these price cuts are slight, they are part of a downward trend that is emerging as more investment in new sources of supply comes into the market,” said AGL’s chief customer officer Melissa Reynolds.
AGL said that the price cuts were “set against rising network and green costs”, referring to rising costs associated with government schemes such as the renewable energy target and energy efficiency measures.
The announcement comes in the same week that Origin Energy announced modest prices reductions in some areas. Energy Australia is yet to confirm its prices changes.
Origin has lowered its electricity prices in Queensland and South Australia, while rates in New South Wales will go unchanged.
Natural gas customers in NSW can expect a price reduction, while those in the other states will see rates stay the same.
Households will ‘have to find extra money’
Origin’s residential gas prices were also stable, except for New South Wales where they are expected to fall by 3 percent.
But the cost of household gas will rise for AGL customers in both New South Wales and South Australia, by 1.8 percent and 2.1 percent respectively.
AGL’s gas price hikes are even more severe for small businesses, at 2.5 percent in NSW and 4.6 percent in South Australia.
SA Council of Social Service CEO Ross Womersley said electricity prices jumped by up to 20 percent last year.
He said consumers had been led to expect a better deal and more substantial decreases.
“It certainly remains a concern that we have many households and small businesses who will be reliant on gas supply who are now going to have to find extra money in their budgets on a weekly basis,” he said.
Time to shop around
Canstar Blue Editor Simon Downes said now is the time of year to review your electricity and gas plans.
“The important thing now is that consumers don’t see that their retailer has dropped prices slightly and assume they must be getting a great deal. It’s still hugely important to shop around as I would expect greater price reductions from other retailers,” he said.
“If your retailer isn’t cutting prices significantly this July, it might be time to find another retailer.
“Take this opportunity to review your options. If you’re still on a standard contract with AGL or Origin – or any other retailer – you could be saving hundreds of dollars simply by moving onto one of their market contracts. And there could be even bigger savings if you switch to a different provider.”