Energy prices are projected to rise by as much as 25 per cent in Australia’s most populous states, impacting everything from how you light your home to charging your electric vehicle overnight.
The Australian Energy Regulatory Authority (AER) has confirmed that electricity prices for customers under the Default Market Offer (DMO) will increase by up to 25 percent depending on the state from July 1.
That’s more than the increases of between 20 and 22 percent set out in a March draft, with the AER saying it took into account the latest inflation forecasts.
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The DMO is an electricity price safety net that applies to household and small business customers on standard retail tariffs in South Australia, New South Wales and South East Queensland – around 600,000 customers in total.
Below are indicative price increases, with figures based on different kWh tariffs: 10,027 kWh for small businesses and between 3911 kWh and 4913 kWh for households with no regulated load, for example.
Victorian residents will also grapple with a price increase from July 1, with the state’s Essential Services Commission announcing a 25 per cent annual price increase for the Victorian Default Offer (VDO), citing high prices in the wholesale energy market.
This equates to an additional charge of $352 for residential customers based on an annual consumption of 4,000 kWh and $752 for small business customers based on an annual consumption of 10,000 kWh.
Introduced in 2019 to offer customers a “simple, trustworthy and affordable” permanent offer, set independently by the regulator, the VDO serves as a reference price for consumers comparing retail offers.
This is not necessarily the lowest price available, as retailers often offer discounted prices to attract customers.
Around 400,000 private customers and 55,000 small businesses use the VDO, and at the same time it is the maximum amount that around 150,000 consumers in “embedded networks” such as shopping centers and apartment buildings can demand.
“We know that households and small businesses continue to face cost-of-living pressures on many fronts, and it is therefore important that the DMO provides a safety net for those who may not have been looking for a better electricity deal,” said AER- Chairwoman Clare Brutal.
“In setting the DMO price this year, we wanted to protect consumers from unjustifiably high prices while allowing retailers to offer consumers better deals than their standard tariffs.
“Nobody wants to see prices rising and we know this is a difficult time. That is why it is important for consumers to check the free and independent bill comparison website www.energymadeeasy.gov.au for a cheaper deal and to verify eligibility for discounts and benefits.
“Consumers who are struggling to pay their energy bills should always contact their retailer as soon as possible, as national energy laws require retailers to provide assistance.”
The Australian government introduced new energy rebates as part of the recent federal budget, with eligible households in New South Wales, Queensland and South Australia receiving up to US$500.
In most cases, these discounts are granted automatically by your energy supplier.
In Victoria, eligible households can also receive $250 plus an additional one-time $250 through Victoria’s Electricity Savings Bonus payment.
“We’ve heard from stakeholders that the pressure on the cost of living is a challenge for many in our community,” said Kate Symons, chair of the Essential Services Commission in Victoria.
“We want to ensure that Victorians are aware of their rights and protections for energy consumers and state and federal energy bill relief packages as higher wholesale energy prices begin to take hold in retail markets and consumer bills.
“If you are a residential customer and are having difficulty paying your bill, you are entitled to assistance from your retailer under the Victorian Energy Act.
“Ask your utility company about payment plans and what concessions, rebates, or utility relief are available.”