Small energy retailers are bracing for a further squeeze in margins as proposed price increases of more than 20 per cent appear insufficient for some to recoup their losses from the unprecedented surge in historic wholesale electricity costs.

The Australian Energy Regulator (AER) on Wednesday proposed households face power price rises of up to 23.7 per cent and businesses up to 25.4 per cent from July 1. The regulator’s chairwoman, Clare Savage, said the result appropriately balanced the dual objectives of protecting consumers from unjustifiably high prices, and allowing retailers to recoup their costs.