Treasury forecasts drop in electricity bills in 2023-24 after government’s wholesale price cap

Wholesale electricity prices are forecast to fall ‘significantly’ in eastern states through 2023.

A new Treasury analysis reveals that eastern states can expect a drop in wholesale prices of between 29 and 44 percent.

The biggest drop (44 percent) is expected in Queensland, followed by New South Wales (38 percent), South Australia (32 percent) and Victoria (29 percent).

Treasury estimates that the drop in wholesale prices will reduce retail electricity bills by $230 in 2023-24 once the cost change takes place.

Last year’s federal budget revealed that households could be expected to pay a 56 percent increase in energy bills over the next two years if prices continue to rise as they did at the end of 2022.

The data compared Australian Stock Exchange data on wholesale electricity prices in November, before the Albanian government’s gas price cap was set, with data for December.

The federal government’s controversial action in December aimed at slashing energy prices through the roof capped new East Coast wholesale gas contracts at $12 a gigajoule for 12 months.

Treasurer Jim Chalmers hailed the treasury data as a sign that the Albanian government’s plan to cut energy prices is “starting to make a difference.”

The opposition has fiercely opposed market intervention and retailers have said they have been fighting to secure gas from producers under the cap.

However, the data shows that wholesale costs have fallen from $213.49 per megawatt hour to $132.84 per megawatt hour in New South Wales from November 30 to December 21.

Queensland’s wholesale cost has dropped to $124.18 per megawatt hour from $219.91 at the same time.

Treasurer Jim Chalmers has hailed the data as a sign that the Albanian government’s plan is “starting to make a difference.”

Albanian government says its plan to reduce energy price increases is working

“The price increases that were predicted were unsustainable and that is why we acted. Our intervention will help ease energy prices a bit for families and businesses,” he said.

“This is not an overnight solution, it will take some time, but it is encouraging to see that the plan is already starting to work.”

However, there are caveats that these price drops could take time to affect residential bills, as consumer prices are heavily influenced by what the retailer paid to secure supply for several months.

If a retailer paid a higher cost for energy before the price relief plan was implemented, it could continue to keep prices high for the consumer.

Industry, Energy and Emissions Reduction Minister Chris Bowen said the federal government was “getting down to business.”

“This targeted short-term response was necessary, but so is the long-term plan to increase the adoption of robust and affordable renewable energy to reduce our reliance on volatile foreign markets and empower Australia’s future as a renewable energy superpower. “.