Electricity prices became deregulated from July 1 in New South Wales, a move the government says will force retailers to offer cheaper rates.
The new regime means fixed and variable electricity charges will automatically be cut by 1.5 per cent.
The Baird Government says more than a million customers on a regulated price will see a reduction in the face value of their electricity charges – the first fall in 15 years.
Member for Port Macquaire Leslie Williams told the Wauchope Gazette the government’s decision, which was first announced in April this year, will fully empower customers to take control of their electricity bills.
“Under this historic reform, customers will be placed firmly in the driving seat and will reap the rewards as competition brings more retailers into NSW that will offer better deals to secure and retain their business,” she said.
Mrs Williams said around 65 per cent of NSW households and small businesses, or around two million customers, have already made the switch from a regulated electricity contract to a competitive market contract in recent years.
“This includes some 165,000 who have made the switch since the government first announced its reform,” she told the Wauchope Gazette.
“Now the remaining 35 per cent of customers can choose what is best for them and take control of their electricity bills. Those customers who have not switched over to a competitive market deal will automatically be transferred to a ‘transitional tariff’.
“For the first time in 15 years NSW electricity customers who were still on the regulated price before today will see a reduction on their bill.”
The decision to deregulate the electricity market followed reports by the Independent Pricing and Regulatory Tribunal (IPART) and the Australian Energy Market Commission (AEMC) in 2013 that found the NSW electricity market was competitive and regulation was unnecessary.
In its report, the AEMC highlighted customers could save $300 to $400 per year from an average household bill of $2500 by taking advantage of the deals offered by electricity retailers to customers on competitive market contracts.
Nonetheless, the opposition claims the new model may lead to prices hikes in the future.
Since July 1, families have received more assistance from the government to pay for their energy bills, with the NSW energy rebate increased from $125 to $150 per year.