Households across the country are set for a power shock after the energy regulator gave providers permission to pass on soaring generation costs.
From 1 July, electricity bills could rise by as much as 18.3%, or $369 per year, for some homes in New South Wales.
Households in South Australia and Queensland are also in the firing line as energy providers move to protect their margins.
The Australian Energy Regulator recently released its Default Market Offer, or DMO, price.
The DMO outlines the maximum amount electricity retailers can charge residential customers and small businesses who have not shopped around for a better deal.
Rising wholesale costs, combined with decade-high inflationary pressures, mean the news is difficult for customers on standing contract offers.
This includes around 550,000 homes and 93,000 small businesses across the three affected states.
The rise comes after new Treasurer Jim Chalmers acknowledged the likelihood of rising power prices, despite both major parties campaigning heavily on lowering the cost of living during the federal election campaign.
The regulator said rising wholesale costs were the main cause of the increase in the DMO price.
Since DMO 2021, wholesale costs for retailers have risen by 41.4% in New South Wales, 49.5% in Queensland, and 11.8% in South Australia.
This is due to several factors, including reductions in thermal generation caused by unplanned outages, higher coal and gas prices, slower investment in new capacity, and increasingly peaky demand.
These pressures have driven up the cost of wholesale electricity contracts for retailers.
“These wholesale market conditions have persisted since the AER’s draft determination in February and have been compounded by the ongoing war in Ukraine, which has led to significant pressure on coal and gas prices globally,” the regulator said.
Extreme weather in New South Wales and Queensland has also affected coal supplies and electricity demand, while further unplanned outages at multiple generators have added more pressure to the market.
The Australian Energy Regulator is set to make a Default Market Offer announcement on Thursday.
This government price cap outlines how much retailers can charge electricity customers on standing offers.
The three biggest retailers, Origin, EnergyAustralia, and AGL, are expected to announce their price increases in mid-June, with hikes expected to be around 15%.
Energy experts are recommending that households consider fixing their energy rates to avoid being hit hard by price rises.
9News has also uncovered some of the top electricity deals currently available, including:
Smart Energy Answers has also partnered with Nectr to offer competitive energy rates and clean, affordable energy at the same time.
This partnership is designed to further assist households looking for smarter ways to manage their electricity costs.
