Update: Repeal of the Carbon Tax

by Energy Action | Jul 18, 2014
Information about the carbon tax repeal and its effect on energy bills.

Legislation was passed on 17th July by the Australian Government to repeal the carbon tax.

What does this mean for the Energy Sector and Energy Bills?

Retailers in the Energy Market are now reviewing how to implement the repeal. Retailers have customer segments where the tax is charged in different ways:

  • for small business and residential customers the tax is contained in a “bundled rate”.
  • for business customers it is either:
  1. as a carbon “inclusive” contract where the tax forms part of the energy rates i.e. contained in the cents per kilowatt rates for Peak, Shoulder (NSW) and Off-peak energy rates, or  
  2. in a carbon “exclusive” contract where the tax appears as a line item on the bill. 

When will customers see price changes?

Although the carbon tax was repealed on 17 July 2014, with effect from 1 July 2014, this does not necessarily result in automatic price reductions from that date. It may take some time for the Retailers to implement the carbon tax repeal in their billing systems.

Bundled Contracts: Small Business Customers on a bundled rate bill are not expected to see a change for a number of months as the carbon is currently bundled in with other components of the bill and will need to be worked through in detail. In the current regulatory environment the issues might be referred to the ACCC to avoid an “incorrect” roll back of the tax.

Carbon Inclusive Contracts: Inclusive contracts are linked to Retailers wholesale energy contracts with Generators and these continue to contain a carbon price component after 1 July 2014 (these were contracts prior to the repeal of the carbon tax). These will not see any immediate change and any potential changes are subject to both retailer contractual arrangements with wholesalers and consumers and requirements under law based on the legislation changes, this review process is expected to take a number of months before the outcome is clarified.

Carbon Exclusive Contracts: Business Customers with carbon exclusive contracts will see reductions via the setting to zero or a removal of the current line item on their bill from as early as the bills received in August for July 2014 consumption. Some retailers have less than two weeks to get this done for their August bill runs and may not achieve the timeline and charge Carbon for July usage but issue a credit in their September issued bills.

What do our Customers have to do? 

Energy Action is discussing with each retailer their progress and methodology in repealing the tax and will be writing to customers with progressive updates. In addition as we receive bills from Retailers we will be checking that they accurately reflect the intent of the repeal legislation.

Where can I go for further information?

As always, you can contact us on 1300 553 551 and talk to your Account Manager or  email us at activ8@energyaction.com.au

Further general information on the carbon tax repeal and its impacts can be found at:

ACCC - Carbon Tax Repeal
Department of the Environment - Repealing the Carbon Tax