A new report from the Australian Energy Regulator (AER) found prices across the National Electricity Market (NEM) for both electricity and gas continued to reduce over summer.
The report found that for the first time since 2015, first quarter wholesale electricity prices remained below $110 per megawatt hour (MWh) across all regions.
Individually, wholesale electricity prices this quarter were the lowest Q1 prices observed since 2012 in Queensland, 2015 in Tasmania, 2016 in South Australia, and 2017 in Victoria.
"With wholesale costs making up around a third of residential electricity bills, and even more for industry, these price falls are expected to result in savings for Australian families and businesses," Minister Taylor said.
"We have been seeing significant wholesale price reductions over the last seven months that show a longer term, structural change to the gas and electricity markets.
"The Government expects that when the cost of wholesale electricity goes down, retailers will pass on these savings to their customers and the Government's big stick legislation is designed to ensure this happens."
Wholesale gas prices were reported at their lowest levels since Q1 2016, with the minimum daily average of spot prices ranging from $3.64 per gigajoule (GJ) in Brisbane to $4.66/GJ in Adelaide.
The AER report a strong correlation between the Asian LNG netback price ($5.33/GJ for Q1) and the domestic spot price at the Wallumbilla Hub ($5.40/GJ for Q1). This is a positive move, allowing domestic customers to access lower spot prices that match the netback price.
The AER also note that the liquidity in the east coast gas market is at high levels compared to this time last year. Recent government reforms to improve liquidity, such as the introduction of the Day Ahead Auctions, has seen over 41 petajoules of previously unused pipeline capacity being accessed.
This helps to get more gas to where it is needed, improving supply certainty for customers in the southern states.
Minister for Energy and Emissions Reduction Angus Taylor said the Wholesale Quarterly Report was good news for households and business.
"For gas, prices fell for the fifth consecutive quarter in the Brisbane, Victoria and Sydney markets, and overall gas prices were at their lowest level in four years," he said.
"It is encouraging to see how increased gas production from Queensland and new gas supply from the NT is flowing into the east coast market, helping to lower gas prices. This supports our commitment to back the Beetaloo and shows the positive impact that new supply in New South Wales could also have for gas prices.
"The Australian Competition and Consumer Commission will continue to monitor gas prices, and how lower prices are flowing through to commercial and industrial customers, as part of its ongoing gas market inquiry."
The AER will continue to monitor the impact of COVID-19 on the NEM.
