What does the future have in store for electricity prices?

Will your electricity bills come down soon 171 6011745 0 14102910 190

Electricity prices haven't been too far from the headlines over recent years, with homeowners and small businesses facing increasing costs.

However, as alternative methods of power generation come to the fore, and action is taken by state governments to kerb rises, there is potential for this trend to be reversed.

Assessing the extent of the problem

The scale of the issue was revealed by the Australian Bureau of Statistics (ABS), which showed that Australian households were using 4 per cent less electricity in 2011-12 than they were four years previously. Even despite this decline in usage, the value of the electricity used has risen 43 per cent over the same period.

"Put simply, nationally we are using less coal to produce electricity but it is costing more to use," said Peter Williams from the ABS.

Comments from the Grattan Institute's David Blowers and Cameron Chisholm also suggest some consumers are paying too much for their energy. Speaking to The Age on March 23, the pair noted that a number of Victorian households are paying as much as $800 a year more than they need to for their energy.

Residents were called upon to make sure they are receiving the most competitive deal for their electricity and gas, especially as there are plenty of good tariffs available for new customers.

There's no denying that electricity has become more expensive over recent years, but is there any prospect of prices coming down in the near future?

Bringing down electricity prices

There are already high hopes that the Australian Energy Regulator (AER) 2014–19 Network Revenue Determination will result in a fall in electricity prices throughout the country.

Among the states in line to benefit is New South Wales, where the state government is also striving to ensure the reliability of electricity supplies, while also bringing down costs for consumers.

Minister for Industry, Resources and Energy Anthony Roberts revealed that both households and businesses can expect to see their bills fall as a result of the AER's decision.

For example, in the Ausgrid distribution area, the average saving on a household bill is forecast to be $165, while small businesses could save as much as $264.

The Clean Energy Council also forecasts that electricity prices will start to come down as a direct result of the stabilisation in network costs. It argues that using more renewable energy sources such as solar and wind will likewise aid this process.

By Nikki Wilson-Everett