From 1 July South Australian small business customers on both default market offers and variable rate deals are facing electricity price increases of up to 29.8%.
These are some of the highest hikes amongst all states and territories, which will further add to already the most expensive electricity bills in the country.
Why are there more price increases and why are South Australians paying the most for their power?
The energy crisis is global and was caused by Russia’s invasion of Ukraine in February 2022. Since then energy costs worldwide have doubled. As wholesale electricity prices increase, energy companies pass costs onto consumers. These account for about one-third to one-half of electricity bills and are “the predominant driver of increased retail electricity prices” according to the Australian Energy Regulator.
Apart from paying the energy provider, customers also pay network charges, which include transmission and distribution costs. One of the reasons for high electricity prices in South Australia is a grid needed to cover a large geographical area, with a relatively small number of customers to pay for it. The final retail bill received by customers comprises retail costs, energy generation costs, network charges (for distribution and transmission) and the costs of government schemes.
There is some relief on the way – albeit relatively minor for many businesses. The Federal Government has announced electricity bill rebates for small businesses in its 9 May budget. If your annual electricity consumption is less than 160 MWh, SAPN classifies you are a‘small business customer’ and you qualify for the $650 rebate, which will be paid in quarterly amounts on $162.50. You do not have to take any action to receive this rebate – it will be applied automatically.
We also know that around 60% of businesses in the state have sought to improve energy efficiency through an external consultant or by conducting their own research, based on findings from the December quarter Survey of Business Expectations. If you are one of the 40% of businesses who haven’t, we would encourage you to do so. In our pre-State Budget submissionThe South Australian Business Chamber advocated for the establishment of a fund to provide micro-grants for businesses to conduct energy audits. We will continue to push for this with our state’s decision-makers.
Another option for information on lowering your electricity bill is using the Australian Government’s Energy Made Easy website, which is a free energy price comparison service for households and small businesses to find and compare electricity and gas plans.
The South Australian Business Chamber’s Policy & Advocacy team is the voice for SA business in ElectraNet’s (which manages the state’s high voltage transmission network) and SA Power Networks’ (which runs South Australia’s the distribution network, including poles, wires and substations) committees, where we use every opportunity to advocate for the best possible outcomes for the South Australian business community. We also use these meetings to provide feedback on energy prices we receive from businesses through our Survey of Business Expectations and through talking with our members.
If you would like to let us know how increased energy prices have affected your business, please contact the South Australian Business Chamber’s Policy and Advocacy team on 08 8300 0000 or via policy@business-sa.com.
