The ACCC has said that electricity retailers are legally obligated to pass more than $900 million in electricity savings to households, but Australians need to contact their supplier, first.
In light of dropping electricity prices, electricity retailers now have legal obligations to pass $900m in savings to Australian households, but Australians need to put in some work to save money on their next bill.
The Australian Competition and Consumer Commission (ACCC) says that considering electricity prices have fallen “almost 9 per cent since the middle of last year,” there is more than $900 million in electricity savings currently available to Australian households.
Retail electricity prices have dropped by 8.8% in NSW, Victoria, QLD, South Australia and the ACT, which amounts to $126 per household every year, and the ACCC says retailers must meet their legal obligations under new laws to pass these savings to households.
The problem is, however, that utility suppliers are not necessarily passing on these savings to their customers unless they are asked directly, or the customer makes enquiries about new plans with competitors.
The ACCC says that it has already approached a number of electricity retailers and reminded them of their obligation to pass on wholesale price savings to their customers.
It says that they’ll be watching vigilantly to determine if these savings have indeed been passed on to Australian households.
“If electricity retailers haven’t passed on the savings to consumers as required by law, they can expect to hear from us.” ACCC Chair, Rod Sims
The ACCC has made it clear that the onus is on the electricity retailers to “comply with new energy market laws, and pass on reductions in their costs to existing customers.”
The commission points out that in June, 2020, the Prohibiting Energy Market Misconduct (PEMM) law came into effect, and stated that electricity retailers must adapt their consumer prices if market conditions become significantly cheaper.
Utility providers that fail to inform their customers and pass on savings, under the PEMM laws, face fines of $10 million, or 10% of their annual revenue per recorded breach.
Electricity Retailers Must Pass $900m Savings to Households: ACCC
“There are two ways that households and small businesses can get the hip-pocket benefit of recent reductions in retailers’ costs: by changing to a new, cheaper plan; or, by waiting for the retailer to lower the rates on the plan that they’re already on,” says the ACCC’s Chair, Rod Sims.
“While we encourage consumers to cash in on the available savings by switching to a better deal, new laws require electricity retailers to pass on cuts in the wholesale cost of electricity.”
“A significant increase in generation capacity, attributed to renewable generation and falling fuel costs, has led to much lower wholesale electricity costs and it’s vital that all Australians now see the savings,” he added.
“Prior to this, we had a decade of sustained electricity price increases that placed unacceptable pressure on households and small businesses. The ACCC is now investigating whether electricity retailers’ current prices, including to their existing customers, are in line with recent wholesale price reductions, and if electricity retailers haven’t passed on the savings to consumers as required by law, they can expect to hear from us.”
The commission concluded that “while the ACCC will be enforcing the new laws, we also urge people who haven’t seen their bill come down to contact their electricity retailer and ask to be put on the best offer for their circumstances.”