Electricity Costs By State
Post on June 13th, 2015
Why is the Price of Electricity Different in each State?
Understanding the way electricity is distributed throughout Australia will help consumers understand how energy prices vary between the states. It will also help you find out how Australia’s electricity network affects your home’s electricity bill.
Electricity prices in households and small businesses throughout Australia are regulated by three separate and independent monitors to ensure consumers pay a fair price. These regulators include the Australian Energy Market Commission (AEMC), the Australian Energy Market Operator (AEMO), and the Australian Energy Regulator (AER).
Each of these organisations work with the National Electricity Market (NEM) to oversee the rules that govern Australia’s electricity prices as well as monitor the energy market. The NEM provides the foundation for the wholesale electricity market in Australia. It makes sure there is always a readily available reserve of electricity in Australia.
What is the National Electricity Market?
The NEM facilitates Australia’s wholesale market in which generators and retailers trade electricity. It spans 40,000 km of transmission lines to supply around 10 million customers (80% of Australia’s electricity consumption) in the six eastern and southern states and territories. There are over 300 generators of electricity in Australia.
The following states are connected to the National Electricity Market (NEM):
- New South Wales
- South Australia
How Retail Electricity Costs by State Are Regulated
The NEM facilitates the exchange of electricity between generators and retailers. Electricity costs by state are determined by electricity retailers that then sell electricity directly to the public. The retailers buy electricity from the generators and re-sell it to homes and businesses. Because there are so many electricity retailers and generators, it is a highly competitive market.
Consumers in each of these states are free to choose their own supplier of electricity and gas. Comparing the discounts and market offers available from the various retailers is the best way to save money on your electricity bills.
Electricity Retailer Costs that Impact Retail Electricity Prices
There are three specific categories of electricity retailer expenses that will impact retail electricity costs by state in Australia:
- Operating costs, including billing, marketing, and meter reading
- Electricity network costs
- Wholesale electricity costs
Each of these different operating costs results in different market prices being offered to customers. While recent trends show that the cost of electricity might be coming down, the past decade has seen huge price increases in all Australian capitals.
The Future of Electricity Costs in Australia
Electricity costs in Australia vary on a state by state basis and they fluctuate over time according to demand and the electricity market. Finding out more about the average electricity bill can help you to compare your own usage rates and cost per kilowatt hour.
A recent comparison of electricity prices in 92 different countries, states, and provinces revealed that electricity prices in South Australia are currently among the highest in the world. As electricity prices continue to spike in Australia, it’s even more important for consumers to learn how to get the best price on their electricity. A market comparison with Electricity Wizard will make sure you are paying the cheapest price available in your region.
No matter what state you live in, it’s more important than ever to become a savvy consumer when it comes to your monthly electricity bill. If you want to find out if you’re paying a good rate for your electricity, comparing the cost of electricity in each state is a good place to start. Comparing electricity providers in your state could potentially save you a bundle each year on your energy bill!