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Energy prices are falling in this one Aussie city - here’s why

power lines
Energy prices are falling in Canberra. (Source: Getty)

Energy prices are surging across the eastern seaboard but one spot has been insulated from the price hikes.

The nation is in the grip of an energy crisis, with state and federal energy ministers and energy regulators meeting this week to find a solution to the escalating problem.

However, one jurisdiction has dodged the turmoil forcing up energy prices for households in most of the country.

In the Australian Capital Territory, long-term contracts for renewable energy that lock in low prices are expected to keep costs down for Canberrrans.

Earlier this week, the territory’s Independent Competition and Regulatory Commission, which sets the ceiling price energy retailers can charge, announced a 1.25 per cent decline in its standing offer price.

“ACT is the only jurisdiction in the national electricity market where regulated tariffs will decline in 2022-23,” ICRC senior commissioner Joe Dimasi said.

“The average annual bill for Canberrans on standing offers will be the lowest, compared to the average standing-offer bills faced by customers in New South Wales, Victoria, Queensland and South Australia.”

The average household in the ACT consuming 6,500kWh a year can expect to save $23 annually, the regulator stated.

That’s compared to a $119-$227 annual increase to the default offer in NSW, and a $165 rise in South-ast Queensland.

South Australian customers will see the smallest increase of $124, while Victoria - which sets its default market offers separately - has also upped its safety net price so the average Victorian household will see an annual increase of $61.

The ACT’s Deputy Chief Minister and Energy Minister, Shane Rattenbury, said the ACT’s 100 per cent commitment to renewable energy was protecting the state from volatility in the energy market.

“It’s great to see our zero-emissions, 100 per cent renewable electricity supply providing us with more stable electricity prices and allowing the ACT to have some of the lowest electricity prices in the country,” Rattenbury said.

The ACT has managed to get to 100 per cent renewables through agreements with clean-energy developers, although some clean energy is also produced locally via rooftop solar and some smaller solar farms.

Under these arrangements, the government funds several different large-scale clean-energy projects to make up for the power it consumes.

Through these contracts, the government has been able to lock in fixed prices over the life of the agreements, helping to protect the region’s energy supply from rising power prices.

Independent economist Nicki Hutley said ACT and South Australia were showing the rest of the nation how investing in renewables delivered greater returns to households and businesses.

Hutley said Australians were paying the price for remaining heavily reliant on fossil fuels for energy.

“Soaring energy bills for many households will exacerbate already-significant inflationary pressures,” Hutley said.

“As one of the sunniest and windiest countries on earth, we have the tools we need.

“Governments can step up by attracting capital and by investing in more labour skills to support the transition,” she said.

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