Latest news with #powerprices
News.com.au
2 days ago
- Business
- News.com.au
‘Could be so much simpler': Energy Minister Chris Bowen announces energy price cap overhaul
Energy Minister Chris Bowen has announced a raft of proposed reforms designed to save Australian households from soaring power prices. Speaking at Australian Energy Week in Melbourne on Wednesday, Mr Bowen said reform to the way the energy price cap mechanism worked outside of Victoria was needed in order to make price caps effective. 'Currently, the independent Australian Energy Regulator (AER) sets the default market offer (DMO) as a benchmark for residential and small business electricity bills in NSW, South East Queensland and South Australia, while here the Victorian default offer is set by the Essential Services Commission,' he said. 'The DMO was intended to act as a benchmark price to stop the worst forms of price gouging while leaving the job of putting downward pressure on prices to competition. 'However, I'll be frank. I don't think it's working that way and reform is needed.' Mr Bowen said the vast majority of bill payers, 'some 80 per cent', could be getting a better deal. 'It's difficult to defend the DMO when the customer is required to do the deal hunting,' he said. 'We know it could be so much simpler.' Mr Bowen announced that in 2026 the federal government would be delivering a 'reformed pricing mechanism' designed 'to get the best deal for consumers and act as the maximum price retailers can charge for standing offers in DMO regions'. 'The reformed pricing mechanism will bring DMO states closer in line with other jurisdictions like here in Victoria, which this year has seen significantly smaller bill increases compared to DMO regions,' he said. The Victorian default offer (VDO) rose by less than 1 per cent in 2024–25, while the DMO varied much more widely; in NSW some residential customers experienced a decrease of about 1 per cent, while in South East Queensland prices increased by about 4 per cent. The announcement has drawn criticism from energy providers who say they're surviving on razor-thin profit margins as it is and the planned overhaul could put small energy providers out of business. One of Australia's biggest energy providers AGL issued a statement in response, saying it would look forward to engaging with the government on the review but 'to reduce energy bills, we need to look at the whole picture'. 'The government and industry are actively working on measures to reduce wholesale electricity costs. At 40 per cent of an average bill, network costs are a big component of bills and are continuing to grow quickly,' the statement read. 'A focus on improving network productivity is essential to keep these costs in check. Retail costs only represent around 10 per cent of an average bill and we need to carefully consider any moves that could lessen competition in the retail market, particularly if smaller retailers were no longer able to operate.'
Bloomberg
2 days ago
- Business
- Bloomberg
An Ex-Marxist Is Taking Risks to Reshape Sri Lanka
Last week, regulators in cash-strapped Sri Lanka raised power prices by 15%. President Anura Dissanayake, who during his successful election campaign last year promised to lower the cost of electricity by a third, had to explain his U-turn. The treasury could no longer afford to subsidize power, he said. Seven months into his term, the former radical has realized that keeping his country from one more crisis requires him to break promises and lose friends.
Yahoo
3 days ago
- Business
- Yahoo
Major electricity price crackdown confirmed ahead of $200 bill hike: ‘Reform is needed'
Australian households could soon be spared from soaring power prices following a crackdown by the federal government. Energy Minister Chris Bowen is set to announce a review of the Default Market Offer (DMO) system as it looks to stamp out overcharging and price gouging. The DMO sets the maximum price electricity retailers can charge customers on default contracts in NSW, southeast Queensland and South Australia. It also acts as a benchmark to help consumers compare plans, and retailers often adjust the rates of their market contracts in line with the default prices. Bowen will tell an energy industry conference today that the DMO system is not working and will be changed next year. RELATED Aussie mum's $1,200 electricity bill shock sparks warning for millions $1,000 ATO school fees tax deduction that Aussies don't realise they can claim Centrelink age pension changes coming into effect from July 1 'The DMO was intended to act as a benchmark price to stop the worst forms of price gouging, while leaving the job of putting downward pressure on prices to competition between energy companies,' he will say, according to his speech notes, The Sydney Morning Herald reported. 'However, I'll be frank. I don't think it's working that way and reform is needed.' Bowen says the reforms will be designed to 'get the best deal for consumers' and will bring the system more in line with that used in Victoria, where households will be hit with smaller hikes next customers on standing offer plans will see an increase of between 8.3 and 9.7 per cent in NSW, 0.5 and 3.7 per cent in southeast Queensland, and 2.3 to 3.2 per cent in South Australia from July 1. According to Canstar, this will translate to an average increase of up to $228 for NSW households, $77 for Queensland households and $71 for South Australian households. Victoria, in comparison, will see an average increase of 1 per cent, with some consumers expected to see a price drop. Maximum prices are set by the state's Essential Services Commission. Price changes range from a drop of $26 to an increase of $90 across the five electricity zones operating in Victoria. Households will be receiving letters from the energy providers over the next few weeks to update them on changes to energy pricing. The government will consult on the reforms, which would come into effect before the next round of annual bill setting. 'Changes could include stripping out the default market offer's competition allowance and putting further restraints on what retailers can claim back from customers in their bills,' Bowen will say. 'The vast majority of billpayers, some 80 per cent, could be getting a better deal. It's difficult to defend the DMO, when the customer is required to do the deal hunting.' Advocacy body Energy Consumers Australia agreed the system was not working and noted it included costs that people should not have to pay. 'It's clear consumers need greater protections from unjustifiably high prices, and we would very much welcome a review,' said Energy Consumers Australia chief executive Brendan French. 'Consumers who don't choose a competitive offer by definition should not have to pay competition costs, nor should they fund customer acquisition costs.'Error in retrieving data Sign in to access your portfolio Error in retrieving data
ABC News
3 days ago
- Business
- ABC News
Federal government to change power price rules to push costs lower
The federal energy minister will announce changes to how benchmark power prices are set, aimed at cutting back how much energy retailers can hit consumers to cover costs like advertising, on Wednesday. The changes could spark pushback from energy retailers, as the minister points to possible new "restraints" on costs being passed on to consumers through power bills. Energy Minister Chris Bowen will use a speech in Melbourne on Wednesday to flag the looming changes to the 'default market offer', which acts as a benchmark power price in New South Wales, South Australia and south-east Queensland. The DMO places a cap on what customers can be charged, while retailers are encouraged to offer more competitive deals. It has been rising faster than energy ministers would like, including lifts of up to 9.7 per cent in NSW this year. The Australian Energy Regulator pointed out that the main driver of the price hikes was administrative costs within retailers — like advertising and the cost of managing customers. Both state and federal ministers pushed back on that price hike when it was released as a draft in March, urging the regulator to consider the revenue and profits retailers were making. But the price hikes went ahead largely as first proposed. Chris Bowen is now announcing plans to change rules to try and rein in those costs. "The DMO was intended to act as a benchmark price to stop the worst forms of price gouging while leaving the job of putting downward pressure on prices to competition between energy companies, " he will say on Wednesday. "However, I'll be frank. I don't think it's working that way and reform is needed. "The vast majority of bill payers, some 80 per cent, could be getting a better deal. It's difficult to defend the DMO, when the customer is required to do the deal hunting." Mr Bowen will point to Victoria, which has its own energy regulator setting a different default market offer to other states, as a more ideal model. "The reformed pricing mechanism will bring (NSW, SA and south-east Queensland) closer in line with other jurisdictions like here in Victoria, which this year has seen significantly smaller bill increases compared to DMO regions," he will say. "The government will consult on the design … but changes could include stripping out the DMO's competition allowance and putting further restraints on what retailers can claim back from customers in their bills." The Australian Energy Council has previously pushed back on suggestions that 'retail costs' are to blame for price hikes, arguing that retail margins are already "notably tight". Chris Bowen will also use Wednesday's speech to talk up Australia's prospects of securing hosting rights for the COP31 climate summit in 2026. The minister is also pressuring Australia's sole rival for hosting rights, Türkiye, to drop out of the race. Australia is bidding to host the conference in partnership with the Pacific, and has the support of Pacific leaders and many European leaders too. Mr Bowen visited Türkiye last year, while travelling to the COP29 summit, to personally lobby officials over the bid. But Türkiye's president, Recep Tayyip Erdoğan, used the conference in Azerbaijan to confirm his country's hopes to host the conference. Mr Bowen will call on Türkiye to step aside and allow Australia to take on the hosting rights unchallenged. "We've been working hard with our international partners and Türkiye to resolve the bid," he said. "That won't have been obvious, because we've kept those discussions private out of respect for Türkiye. It was legitimate for Türkiye to wait for the results of our election, given the opposition's position. "But given our election, and the strong support for our bid from our group, we are now hopeful for a resolution before too long." The minister will determine Australia's 2035 emissions target in September, a key milestone for Australia heading towards COP31. It will be released concurrently with the government's long-term Net Zero Plan that will step out Australia's pathway to net zero emissions by 2050.
Bloomberg
11-06-2025
- Business
- Bloomberg
European Power Surges on Fresh Fears of French Reactor Corrosion
Power prices across Europe jumped as nuclear giant Electricite de France SA reported signs of 'stress corrosion' at a reactor, renewing fears that generation may be curtailed once again. The French utility in 2022 and 2023 was forced to halt part of its atomic fleet, the backbone of western Europe's electricity market, to fix cracked pipes. That sent energy prices soaring as the repairs coincided with dwindling Russian gas supplies to the continent.
