Australian regulator expects lower household power bills from July
SYDNEY, March 19 (Reuters) - The majority of Australian homes and businesses could enjoy lower power bills from July after two years of soaring prices, the country's energy regulator said on Tuesday, bringing relief to families battling rising living costs amid high inflation.
The Australian Energy Regulator (AER) released its draft decision on the default market offer - the maximum price energy retailers can charge customers - that it said would still allow a retailer to recover costs and make a profit.
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AER expects a 0.4-7.1% fall in prices for most residential customers and 0.3-9.7% for small businesses, though some could face modest increases depending on their region.
Power prices have spiked in Australia over the past two years in the wake of the Russia-Ukraine conflict and more frequent outages at coal-fired power stations.
Wholesale electricity markets have stabilised since their extreme peaks of 2022, AER Chair Clare Savage said in a statement, adding a range of costs were factored into the draft determination including network, environmental and retail costs.
"We know that economic conditions have put pressure on many Australians and the increases in electricity prices over the last two years has made energy less affordable for many households. In light of this, the AER has, in this decision, placed increased weight on protecting consumers," Savage said.
It is estimated that price changes for all residential and small business customers on standard plans will be less than the rate of inflation, AER said.
Australian consumer price inflation slowed to a two-year low in the fourth quarter to 4.1% - well below the peak of 7.8% touched in December 2022 - but it remained above the central bank's annual inflation target band of 2-3%.
The draft determination, open to public consultation and stakeholder feedback, sets out the approach the AER intends to take to determine the final default market offer price, which will be released in May.
(Reporting by Renju Jose in Sydney; Editing by Stephen Coates)