Electricity bills for hundreds of thousands of Australian households are set to soar by up to 31 per cent this year, even after the federal government’s emergency intervention brought down wholesale prices and avoided larger possible rises.
On Wednesday, the Australian Energy Regulator released its draft decision on increases to the main caps on consumer energy bills from July 1, which are expected to increase standard power bills between $300 and $564 per year.
The regulator’s so-called “default market offers” – price caps on what retailers can charge households and businesses that do not take up special deals or bundle utilities bills – would rise in all states across the east-coast electricity grid.
Starting from July, default offers will increase by up to 19 per cent in Queensland, 21 per cent in South Australia and 23 per cent in NSW. Households in Victoria, where the state’s Essential Services Commission determines its own default offer, the price cap for households will rise by 31 per cent, or $426.
“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 default market offer to protect consumers as well as allowing retailers to continue to recover their costs and innovate.” – Australian Energy Regulator chair Clare Savage
The looming retail power bill hikes are being driven by sharp rises in the cost of wholesale electricity across the east-coast grid. The wholesale increases last year – from an average of $85 a megawatt-hour to as much as $264 a megawatt-hour – resulted from coal-fired power plants breaking down during peak demand periods, as well as sharply higher costs of coal and gas as a result of the war in Ukraine.
Source: The Age, Wed 15th March, 2023