Power prices to soar as Australia heads into winter
Australian households face steep electricity price hikes in the coming months, prompting fears for the most vulnerable as the country heads into winter and heating costs soar.
But the increases will be less severe than those foreshadowed before the government stepped in to cap coal and gas prices in an attempt to rein in skyrocketing power costs.
The Australian Energy Regulator on Wednesday released its draft default market offer decision for the 2023/24 financial year, which foreshadowed residential electricity price increases of between 19.5 and 23.7 per cent depending on the state and provider.
The default market offer represents the maximum price energy retailers can charge residential and small business customers in NSW, South Australia and southeast Queensland.
Most customers are on lower, discounted rates, but the default offer also serves as a benchmark for wider prices.
The regulator said default offers for residential customers in NSW were expected to increase by between 20.9 per cent and 23.7 per cent, while prices would be up nearly 20 per cent in southeast Queensland and 22 per cent in South Australia.
It estimated small business customers could face price increases of between 14.7 per cent to 25.4 cent depending on their regions and providers. A final decision on the offers will be made in May.
Without the government's energy market intervention, the regulator had warned the residential offer could increase by more than 50 per cent in some regions.
Victoria also released its draft default offer on Wednesday with proposed increases of about 31 per cent for residential customers and 33 per cent for small businesses from the start of July.
More than 450,000 customers across the state are on the default offer.
In regional Queensland, the draft increase is 28.9 per cent for a typical residential customer and 26.1 per cent for small business users.
Energy Minister Chris Bowen conceded the price rises would have a big impact for many households, but he added the government would provide more relief in the budget through rebates.
"These are big increases ... and they will hurt for many families, (but) these increases would have been much much higher without the intervention of the Albanese government last year," he said.
But opposition energy spokesman Ted O'Brien said the intervention by the government was not enough.
"Winter is on the way and I have grave fears that senior citizens and families doing it tough won't turn on the heater for fear of their energy bill," he said.
"A record high of more than 82,000 households are now on hardship programs, proving that those who can afford it least will be the ones paying the most."
Energy Consumers Australia chief executive Lynne Gallagher said vulnerable customers needed to be shielded from the price hikes.
"These electricity price increases will hurt, heaping more pressure on household budgets and on small businesses. There are things governments and retailers can do now and we're calling on them to explore every possible option," she said.
"We know that as many as half of households could be missing out on assistance that they are eligible for, often because of red tape. These are extraordinary times and so we ask that retailers take action above and beyond to support their customers."
Australian Energy Regulator head Clare Savage said there had been unprecedented volatility in wholesale electricity markets because of high coal and gas prices and outages at coal-fired power plants.
"We know this (price increase) is difficult news for customers who are facing cost-of-living pressures ... 20 to 22 per cent is still a significant increase, but it is much lower than it would have otherwise been," she told ABC Radio.
Ms Savage said the regulator had to balance the need to protect consumers from unjustifiably high prices with the need to ensure retailers could recover their costs and provide competition.