In July electricity prices are expected to skyrocket up to 25%. This comes from changes made by the Australian Energy Regulator (AER). Only certain businesses will be affected by this depending on where you are based. The AER has announced a new default market offer for the next financial year which impacts power prices for households and businesses. This has been estimated as a 20-25% increase from July first.
Why do the AER set a default market offer?
The default market offer is the maximum an energy retailer can charge customers on default tariff contracts. There are different energy companies across different states, which all have different contracts and plans for power prices. Meaning there is no set price for electricity across these states. The default market offer gives domestic and business companies a benchmark, making it easier to compare different energy companies and contracts. This also makes sure everyone is paying a reasonable amount for electricity.
Which areas will be affected?
This new price rise will only affect those on default tariffs in South Australia, New South Wales and South East Queensland. However, this will affect more than 600,000 customers across these areas.
All the states across Australia have a different regulatory body when it comes to energy prices. Therefore, the price rises will be different across all areas. The remaining states and territories energy rates will be made clear in the next few months.
The reason that energy prices differ across the states hasn’t got much to do with actual energy prices but more to do with delivery charges of the energy. For example, in areas in the south where it Is less populated and fewer people use the energy lines, delivery charges are more expensive than in places that are more populated such as Sydney.
Why are energy prices rising?
Energy price rises are linked to volatility in the energy market, which makes them difficult to predict. Current forward prices are like the prices we are seeing now; however, prices can go up and down depending on international issues that affect the market.
If global fossil fuel prices settle, then it might be possible to see energy prices go down across Australia.
What can your business do to reduce energy prices?
If energy prices are set to rise in the state or territory your business is based, it might be best to look at ways that you can reduce your energy bills.
Having an energy consultant
Having a business energy consultant is one way you can reduce bills. At Resolve Energy we can advise you on the best time to renew your energy contract. This will help your business save money on bills in the long run. Get in touch with us today to see how much you could save.
Energy-efficient practices
With energy prices being higher it is best to investigate different things that can reduce your business’s energy consumption. This could be installing new infrastructure such as Solar panels or making smaller changes that could have a huge impact on your business, such as:
- Reduce air conditioning and water temperatures
- Keep the cool air in by keeping doors closed
- Replace old office equipment
- Use as much natural light as possible.
If you're looking to save money on your energy bills then why not get in touch today? The relationships Resolve Energy has developed with over 24 of the UK’s biggest business energy suppliers allows our energy experts to source the best business energy rates available for your company right when you need them. Request a free quote today and start saving money on your energy.
