Australian families facing increased electricity bills

News posted on 07.03.2014 on Research & developement

News.com.au has reported (23/02/14) that Australian families face an extra $24 per month on their electricity bills due to a carbon tax increase - after it was meant to have been axed.

Even though the Environment Minister Greg Hunt said that the repeal of the carbon tax would take effect from July 1 2014, it appears unlikely that prices will fall due to the greed of power retailers and a small clause in wholesale electricity contracts.

Fiona Melville, leading energy lawyer at K&L Gates told News Corp Australia that consumers should not be thinking that they will get an energy bill reduction from July 1. Unless there is a vote for a retrospective adjustment and retailers were willing to take a hit on their profits to return money to consumers, the 'price on pollution' will continue.

News Corp asked leading retailers Energy Australia, AGL and Origin whether customers would continue to pay carbon tax after July 1. None could guarantee that the carbon tax would be removed.

Families in freestanding homes on average spend $3,000 a year on electricity which includes about $22.50 a month of carbon tax. A household with fewer residents would only spend around $2,000 a year with $15 of that being carbon tax. These figures vary from region to region.

From 1 July until repeal, there will be a five per cent price increase applied to wholesale power.

Most analysts have said that removing the carbon tax could cause a price reduction of 7.5-9 per cent (depending on the geographic area). Other costs could go up such as network expenses which would reduce the actual drop on customers bills.