The intention of this report is to provide an indication of future trends in changes to residential electricity prices and the drivers behind them. It should be noted that the projected prices in the report are not the same as the regulated retail tariffs set by jurisdictional regulators and that price changes shown in the report are not a definite forecast of future residential electricity prices.

This work is copyright. The Copyright Act 1968 permits fair dealing for study, research, news reporting, criticism and review. Selected passages, tables or diagrams may be reproduced for such purposes provided acknowledgement of the source is included. Where data or other information from AEMC reports is used in other parties’ publications, those parties must make it clear where further interpretation, derivation or calculation has been applied to the data.

A report published on 21 March 2012, commissioned by the Energy Users Association of Australia, entitled “Electricity prices in Australia: An international comparison,” used data from this report. It stated incorrectly that “The AEMC expects household electricity prices to rise another 30% in real terms by 2013/14.” The AEMC wishes to make it clear that that figure was a calculation derived from AEMC data, and is not a direct reproduction of data or commentary from this report.

Scope of the report

This report sets out likely future trends in residential electricity price movements in Australia, and the drivers behind those trends. To identify the trends, we have projected prices for one, flat rate, electricity tariff type.  Accordingly, the projected residential electricity prices are not the same as the regulated retail tariffs set by jurisdictional regulators or Governments.  They are not a definite forecast of future residential electricity prices.

For each jurisdiction and at a national level, this report adopts indicative prices for a base year 2010-11 and projects prices for the three financial years from 2011-12 to 2013-14.

Assumptions adopted in projecting residential retail electricity prices

The projected residential electricity prices in this report:

• are for standard supply arrangements only. We understand that in some jurisdiction more than 50 per cent of customers are supplied under market arrangements; and
• assume certain consumption levels for a residential customer in each distribution area.

However, it is expected that the trends identified in this report would also apply to those customers on other supply arrangements and with different consumption levels.

Data in this report has been sourced from existing retail pricing decisions by jurisdictional regulators and Governments where possible. The network (transmission and distribution) components have been provided by the Australian Energy Regulator based on existing network determinations and assumptions of the annual consumption of residential customers for each distribution and transmission network. Where data was not available it was estimated.