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Upcoming Electricity Price Hikes for Australian Households
As of July 1, millions of Australian households will experience higher electricity costs, following announcements from major energy retailers AGL and Origin. Some households may see an increase of up to $300 in their utility bills over the next year.
Price Increases by Region
AGL will implement the following price changes:
- New South Wales: 13.5% increase, translating to an average annual increase of $267 per household, with high usage customers potentially facing increases of up to $300.
- South Australia: Prices will rise by 7.8%, leading to an average bill increase of $200.
- Queensland: A 7.5% increase is expected, equating to an average increase of $155.
- Victoria: The increase will be 6.8%, with bills expected to rise by about $110.
For Origin Energy, the changes are as follows:
- New South Wales: Average price raise of 9.1%.
- South Australia: Average increase of 5.5%.
- Queensland: Increases will be between 3% to 4%.
- Victoria: Rate adjustments are pending, but rising gas costs will add around $85 to the average household bill.
In anticipation of these price changes, energy retailers will notify customers via letters and emails in the lead-up to the adjustments.
Factors Behind the Price Hikes
The recent increases are attributed to a number of factors:
- Rising network costs.
- Increased service provision costs.
- Elevated wholesale electricity prices.
The Australian Energy Regulator has also boosted the default prices for the upcoming year, impacting standard energy plans that are primarily applicable to customers who do not actively shop for better deals. While only 10% of customers utilise default offers, these prices often serve as a pricing benchmark for other contracts in the market.
Households have already witnessed two consecutive years of price surges, with the average electricity bill reportedly increasing by as much as $360 since June 2023. In response, the federal government has extended energy bill relief until the year’s end, starting with a $75 quarterly credit available from July 1.
Expert Insights and Recommendations
Sally Tindall, the insights director at Canstar, has urged households to actively compare energy offers. She notes that, amid the approved hikes, consumers must remain vigilant about their electricity costs:
“The reality is that such hikes are largely unavoidable, particularly in NSW, Queensland, and South Australia this winter,” she emphasised. Despite this, there remains an opportunity for consumers to exert control over their bills by exploring competitive options.
To assist in finding better rates, Tindall highlighted that the reference prices provided by energy retailers can be useful indicators for evaluating energy plans. In Sydney, average single-rate plans currently sit about 7% below the reference price, with some plans offering discounts as high as 23%. In Brisbane, the variation is even more pronounced, with average discounts nearing 6% and some providers offering up to 27% off the benchmark price.
Tools for Consumers
Australian households can utilise various comparison tools to locate more competitive energy plans:
- The Australian Energy Regulator’s Energy Made Easy website provides a platform for consumers to compare electricity prices.
- For residents in Victoria, the Victorian Energy Compare website offers similar comparison services.
These resources empower consumers to take active steps towards managing their electricity expenses amid the forthcoming increases.
In summary, as energy prices are set to rise significantly, it is crucial for Australian households to stay informed and proactive in seeking better deals to mitigate rising costs.
