Despite an easing of wholesale power prices since the Albanese Government introduced its gas and price coal caps, the Australian Energy Regulator (AER) today unveiled a draft electricity price increase of 20-25% for customers on default market offers (DMO).

It is estimated that residential customers on standard retail plans could face price increases of around 19.5% to 23.7% depending on the state in which they live.

Meanwhile, small business customers could face price increases of around 14.7% to 25.4%.

The price hikes will affect around 600,000 customers in South Australia, New South Wales, and South-East Queensland with the uplift adding to the pain of record inflation, rising cost of living, and 10 successive rate rises.

Customers in New South Wales can expect to see power bills rise by as much as 23.7%, while those in South-East Queensland and South Australia face increases of as much as 19.8% and 21.8% respectively. 

For those in Victoria, power bills are set to climb much higher with households and small businesses bracing for a 30% and 31.1% increase respectively.  

Victoria’s Essential Services Commission (ESC) said a typical household bill would rise from $1,403 to $1,829 per year.

AER Chairwoman Clare Savage said the increases are significant, but they could have been as high as 40-50% without the Federal government’s intervention in December. 

“We know many households and businesses are already struggling with cost-of-living pressures,” Ms Savage said.

“This is certainly a challenging environment for people to hear that further electricity price rises are on the horizon.

“Energy prices are not immune from the significant challenges in the global economy right now; that’s why it’s more important than ever that we strike a balance in setting the DMO to protect consumers as well as allowing retailers to continue to recover their costs and innovate.”

Climate Change and Energy Minister Chris Bowen echoed a similar sentiment, noting consumers would be paying more if not for the caps imposed by the government.

“Today's draft increases are up to 29% lower than the AER projected in late 2022, more than halving the increase that was expected before the government acted on skyrocketing coal and gas prices," Mr Bowen said.

“This means hundreds of dollars [between $268 and $530] of additional increase avoided for households, and up to $1,243 additional increase avoided for small business customers.

“But we know that every increase will still be tough for consumers and small businesses – and that’s why we will continue to work with the States and Territories to deliver energy bill relief in the May Budget.”

A final decision on the power bill hike will be decided in May, with new prices to come into effect from 1 July.

Another hit to the back pocket

Australian Council of Social Service (ACOSS) CEO Dr Cassandra Goldie said the rise in the DMO price means another hit to household budgets, especially low income households.

“We are worried about what consequences this leaves for people, including further debt, disconnection, or homelessness. These are unacceptable choices to be made in such a wealthy country," Dr Goldie said

CommBank spending data released Tuesday showed household spending on utilities is 5.8% higher than a year ago, a figure that would have been much higher had it not been for state government bill relief through 2022.

Shop around for the best deal

Ms Savage said there are good deals available for customers who take the time to see what other offers are out there.

“It’s important to understand that the DMO is not the best offer, it is a safety-net,” she said.

“We encourage consumers to shop around for the best electricity deal for your circumstances. The AER’s free and independent comparison website can help.

“If you’re struggling to pay your bills, contact your retailer as soon as possible because under national energy laws they must assist you.”


Advertisement

Need somewhere to store cash and earn interest? The table below features savings accounts with some of the highest interest rates on the market.

Provider

4000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details
  • Bonus rate for the first 4 months from account opening
  • No account keeping fees
  • No minimum balance

High Interest Savings Account (< $250k)

  • Bonus rate for the first 4 months from account opening
  • No account keeping fees
  • No minimum balance
010000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details
  • Earn up to 5.40% pa by depositing $1,000 in the previous month
  • No account fees
  • Easy access to your money

Saver Account (<$250k)

  • Earn up to 5.40% pa by depositing $1,000 in the previous month
  • No account fees
  • Easy access to your money
4000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details
  • A high-interest online savings account with no monthly fees, easy withdrawals and award-winning digital banking
  • No withdrawal notice periods or interest rate penalties

Savings Account (Amounts < $250k)

  • A high-interest online savings account with no monthly fees, easy withdrawals and award-winning digital banking
  • No withdrawal notice periods or interest rate penalties
02000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details
  • Download the App to open your account
  • No monthly fees on any of your Save accounts
  • Deposit $200 per month to activate bonus interest

Save Account

  • Download the App to open your account
  • No monthly fees on any of your Save accounts
  • Deposit $200 per month to activate bonus interest
Important Information and Comparison Rate Warning

All products with a link to a product provider’s website have a commercial marketing relationship between us and these providers. These products may appear prominently and first within the search tables regardless of their attributes and may include products marked as promoted, featured or sponsored. The link to a product provider’s website will allow you to get more information or apply for the product. By de-selecting “Show online partners only” additional non-commercialised products may be displayed and re-sorted at the top of the table. For more information on how we’ve selected these “Sponsored”, “Featured” and “Promoted” products, the products we compare, how we make money, and other important information about our service, please click here. Rates correct as of June 19, 2024. View disclaimer.

Image by Jonathon Hanna via Unsplash