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Households on the eastern seaboard will be hit with electricity bill increases of up to 24 per cent from July 1, adding to the mounting cost-of-living pressures facing Australian consumers.
The Australian Energy Regulator on Thursday morning locked in this year’s increases to default offers – price caps on what retailers can charge customers who don’t take up special deals – raising the limits by up to $349 in Queensland, up to $439 in South Australia, and up to $435 in NSW.
Power prices are set to increase for consumers in parts of Australia.Credit: Joe Armao
It means households will face electricity prices rises of between 20.8 per cent and 23.9 per cent from July 1, depending on the region. Small business customers are facing bill hikes of 14.7 per cent to 28.9 per cent, depending on the region.
In Victoria, where the state’s Essential Services Commission sets its own default offer, a draft decision in March foreshadowed that price caps for households would rise by 31 per cent, or $426, but a final determination is yet to be made.
This year’s default offer changes reflect significant spikes in wholesale prices – what retailers pay for power before they sell it onto their customers – driven by a spate of coal-fired power station failures last year, and the war in Ukraine driving up the cost of the coal and gas that’s needed to generate electricity.
Australian Energy Regulator chair Clare Savage said households and small businesses that were struggling with bills should contact their electricity retailer as soon as possible because the companies are compelled by the law to offer assistance.
“No one wants to see rising prices, and we recognise this is a difficult time, that’s why it’s important for consumers to shop around for a better deal,” Savage said.
While still significant, this year’s increases were not as large as they would have been if the Albanese government had not introduced emergency laws in December to temporarily cap the price of domestic gas at $12 a gigajoule and domestic coal at $125 a tonne, the regulator has said.
Federal Climate Change and Energy Minister Chris Bowen earlier this year said the government’s intervention to cap wholesale coal and gas prices, paid by power generators, had saved households hundreds of dollars in potential increases.
“The government, faced with large increases in the default market offer, urgently acted to curb spiralling prices of gas and coal and shield Australian families and businesses from the worst of these energy price spikes,” Bowen said.
Social services groups have warned that this year’s looming price hikes would be devastating for low-income Australians and worsen the cost-of-living crisis.
“People on the lowest incomes do not have anything left in their budgets to cut back on and are at breaking point,” Australian Council of Social Services chief Cassandra Goldie said in March.
The Australian Council of Social Services called on the federal government to update the regulator’s guidelines to lower retail margins, lift JobSeeker payments to at least $76 a day and provide an emergency energy relief payment of up to $2000 for customers in hardship.
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