The passage of the direct energy bill support measure by Federal Parliament will be welcome news for vulnerable households and small businesses, according to the peak body for energy generators and retailers, the Australian Energy Council.
The AEC's Chief Executive, Sarah McNamara, said "It is a positive feature of the legislation. In the short-term direct support will make a difference on the bills many households and small businesses receive."
Ms McNamara said that in contrast the fuel price caps that form part of the bill were extremely difficult to get right and would also take time to filter through to end users.
"As we have said we can understand and appreciate the intent of the government in seeking to put downward pressure on prices by reducing generator costs, but price caps should only be used as a temporary tool and won't bring immediate relief.
"Regulated electricity prices have already been set through to 30 June 2023 and the next Default Market Offer (DMO) won't be finalised until May next year.
"Retailers and generators enter contracts to hedge their load. This means that many of the contracts for the next 12 months have already been settled on the basis of higher prices," Ms McNamara said.
For more details on the wholesale market and retail prices see this: Background Briefing: How coal and gas prices impact retail electricity bills .
About the Australian Energy Council
The Australian Energy Council is the peak industry body for electricity and downstream natural gas businesses operating in the competitive wholesale and retail energy markets. AEC members generate and sell energy to 10 million homes and businesses and are major investors in renewable energy generation. The AEC supports reaching net-zero by 2050 as well as a 55 per cent emissions reduction target by 2035 and is committed to delivering the energy transition for the benefit of consumers.
