The Squiz

The Australian Energy Regulator says many Aussies – but not all – could be in for slightly lower power bills in the 2024-25 financial year, saying “the majority of residential customers could have price reductions of between 0.4% to 7.1%”. In dollar terms, that could equate to $57 a year. The regulator released its draft default market offer yesterday, showing benchmark electricity prices (aka the ones retailers advertise to the public) in Sydney and South Oz are on the way down as prices ease from the “extreme peaks of 2022”. There was good news for business owners too – the regulator says “the majority of small business customers could see reductions between 0.3% and 9.7%”.

That sounds positive…

Yes, but not for everyone… Prices are going in the opposite direction for households in regional NSW and southeast Queensland, with the regulator flagging increases of up to 2.7% – equating to about $53 a year. Tasmania, the ACT and Western Oz set their own default market offers, and while Victoria is yet to share what it’s thinking, reports say it’s looking at a reduction of about 6.4%. If you’re wondering why the prices are a bit topsy-turvy, regulator Clare Savage says the wholesale energy market (where retailers buy energy to sell to consumers) has stabilised, but they’re still experiencing increasing prices in other parts of the system thanks to high interest rates and crawl towards clean energy. The other thing to know is that the regulator’s proposed changes are still subject to consultation, and it’ll release its final decision in May.

Is there anything else to know?

Yep – energy prices have been one of the major drivers of inflation in Oz in recent years, and reports say these falls could help the Reserve Bank to cut interest rates in the future. And while we’re on the topic, the Reserve Bank shared its latest rate decision yesterday, holding the cash rate steady at 4.35%. It’s on hold because “inflation continues to moderate but remains high” – meaning it wants to see more evidence of inflation moving closer to the 2-3% target rate rather than the current 4.1% before it cuts rates. That’s expected to happen next year… Economist Cherelle Murphy says all eyes will be on the next big official data drop on 24 April. “If [inflation] comes down faster than expected, that may open the door to rate cuts sooner than the last part of this year,” Murphy says.