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Upcoming Electricity Price Hikes Take Toll on Australian Households
Electricity bills are set to increase significantly across several Australian states, affecting many households just as they navigated the cost-of-living crisis. According to Canstar’s data insights director, Sally Tindall, the upcoming electricity price hikes could be "too much for many families to bear," particularly as we enter a notoriously energy-intensive season.
Key Price Changes
Starting July 1, residents in New South Wales, South East Queensland, South Australia, and Victoria will see increases in their Default Market Order (DMO) and Victorian Default Offer (VDO). These mechanisms serve as benchmarks for pricing, establishing maximum rates that energy providers can charge those on default contracts. These changes could impact over 1.3 million customers, including approximately 800,000 on the DMO and nearly 600,000 on the VDO.
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New South Wales:
- Ausgrid: $155 increase; average bill projected at $1,965 for 2025-26.
- Endeavour Energy: $188 increase; average cost at $2,411.
- Essential Energy: $228 increase; average cost at $2,741.
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Queensland: Specifics not provided, but price increases are anticipated.
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South Australia: Anticipated changes, specifics not detailed.
- Victoria:
- AusNet Services: $6 increase; average annual cost at $1,908.
- CitiPower: $90 increase; average cost at $1,546.
- Jemena: $26 reduction; average cost at $1,638.
- Powercor: $4 increase; average cost at $1,703.
- United Energy: $25 increase; average cost at $1,579.
Factors Influencing Price Increases
The Australian Electricity Regulator (AER) reports that wholesale market and network costs—the major contributors to DMO pricing—have risen by 2% to 12%. David Koch from Yahoo Finance highlights that high demand for electricity, particularly due to extreme weather conditions, has exacerbated the situation. This increased demand coincides with reduced coal availability and transmission issues, leading to a significant rise in prices.
With nearly 3% of customers already in arrears on their electricity payments—an average debt of $1,395—many households may struggle further once these new rates come into effect. The federal rebate aimed at easing some of the financial burden will be beneficial in the short term, but without an extension of this relief, more families could face steeper bills in the upcoming year.
Consumer Tips for Managing Rising Costs
Despite the impending increases, Tindall emphasises the importance of shopping around for energy plans. She notes that switching from a standard plan to one of the more competitive offers could yield savings of upwards of $400 annually—potentially offsetting the additional costs.
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Act Now: Households are encouraged to investigate alternative plans immediately. Switching before the price hikes take effect on July 1 is feasible, especially for those not locked into long-term contracts.
- Regular Reviews: Tindall advises consumers to reassess their electricity plans periodically to find the best deals, which can be crucial given the fluctuations in the market.
Conclusion
The upcoming electricity price hikes present a significant challenge for Australian households during an already tough economic period. While government assistance may provide temporary relief, families must proactively explore cost-saving measures by reviewing their energy plans to mitigate financial strain. Keeping an eye on the latest offers could prove beneficial as these changes roll out.
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