ACT electricity price rise to add $240 to average annual bill

The price bump would be more than offset for many residential customers by the federal government's $300 power bill rebate scheme.

The price of ActewAGL's standing electricity offers will be able to rise by up to 12.75 per cent in 2024-25, the Independent Competition and Regulatory Commission said.

The commission said the increase was lower than forecast in its draft report on electricity price regulation, and lower than if the commission had adopted ActewAGL's preferred method of calculating electricity costs.

Joe Dimasi, senior commissioner at the Independent Competition and Regulatory Commission, said the methodology changes were designed to better reflect the costs faced by retailers and balance reasonable prices for consumers and competition in the ACT's electricity market.

"Despite the increase in regulated electricity prices, electricity bills for ACT customers on standing offers are expected to remain some of the lowest in the country," Mr Dimasi said.

The 12.75 per cent increase would result in an extra $240 added to the bill of an average residential electricity customer consuming 65,000 kilowatt hours of power a year. The customer would pay $2122 annually.

A residential customer using a small amount of electricity - 3800 kilowatt hours - would pay $1240 a year, a rise of $140.

A residential customer using 7500 kilowatt hours of electricity annually, considered a large consumer, would pay $2448, an increase of $277.

The average non-residential customer using 25,000 kilowatt hours would see an increase to their annual bill of $922, taking it to $8160 a year.

"For residential customers, a small customer may represent a single person living in an apartment, an average customer may be a small family in a townhouse, and a large customer may be a large family in a detached house," the commission said.

The commission said the regulated prices only applied to ActewAGL's standing offer tariffs, and electricity users could save up to $700 a year by moving to a market offer.

The regulated standing offer for the average residential customer in the ACT in 2024-25 will be the cheapest in Australia, an analysis published by the commission showed.

Residential electricity consumers on standing offers has fallen in the ACT from 49 per cent in 2018-19 to 19 per cent this financial year. Non-residential customers on standing offers has fallen from 67 per cent to 40 per cent in the same period.

"While the number of customers on standing offers had declined in the past years in the ACT, it is still a relatively high number compared to other Australian jurisdictions such as South Australia, Victoria and New South Wales," the commission said.

The commission said there were 172 electricity offers available to consumers in the ACT this year.

In January, the commission's draft report forecast, with "low confidence", a 17 per cent increase to electricity prices in the ACT.

The increased prices in 2024-25 was mainly driven by the increased network costs set by the Australian Energy Regulator and higher costs for the ACT government's large-scale feed in tariff scheme, the commission said.

The feed in tariff scheme contributed 8.95 per cent of the increased cost.

"Last year, the scheme resulted in a rebate to ACT consumers, protecting them from the large increases in electricity prices experienced in other jurisdictions. In 2024-25, the scheme will incur an overall cost which is passed on to consumers," the commission said.

"Nevertheless, the [large-scale feed in tariff] costs announced by the Minister in February 2024 were lower than our estimate in the draft report, and the impact of LFiT costs on electricity price for 2024-25 is less significant. This is because of the Minister's Reasonable Cost Determination for 2024-25 expedited the return of funds collected under the scheme to ACT consumers."

Under the scheme, renewable energy generators are paid a top-up amount to meet the agreed price when wholesale electricity market prices are below an agreed fixed price.

When electricity market prices are higher than the fixed contract prices, the generators earn more.

Wholesale energy costs are set to fall in 2024-25, while network, retail and the feed-in tariff costs will rise.

The federal government plans to spend $3.5 billion in the 2024-25 financial year on electricity bill rebates for more than 10 million households.

Electricity retailers will apply $75 credits to quarterly power bills for households and some businesses under the scheme, which was announced in the federal budget.

Chief Minister Andrew Barr said further targeted support for Canberra's vulnerable households would be announced in next month's budget.

"The ACT Government welcomes confirmation by the ICRC that electricity prices in the ACT for the average residential home will reduce in the next financial year," Mr Barr said.

"The average household on a standing offer will see their bills fall by $60 in 2024-25.

"This will occur through the combination of the Commonwealth government $300 electricity rebate, the ACT government reasonable costs determination decision associated with the renewable energy large scale generation contracts and the ICRC's development of a new, fairer approach to determining the maximum increase in safety net prices."