Cost of living crisis: Energy bills to increase as much as 130 per cent

Financial pain is on its way to thousands of Aussies as energy the energy retailer passes on hefty increases and retailers expect prices to skyrocket.

Millions of Australian are about to be dealt a fresh blow to their cost of living woes with soaring electricity costs after the energy industry watchdog increased prices by hundreds of dollars a year.

The Australian Energy Regulator (AER) will pass on hefty increases to the benchmark power price which will rise up to 18.3 per cent in New South Wales, 12.6 per cent in Queensland and 9.5 per cent in South Australia.

The prices rises will come into effect from July, slugging consumers with an extra $250 a year in some cases.

Clare Savage, the chair of the AER, said the decision to increase prices substantially was “particularly difficult” but advised customers to shop around for the best deal.

“We understand the significant impact they will have on some consumers who may already be struggling with cost-of-living pressures,” she said.

“If a large number of retailers are unable to recover their costs and are forced to exit the market – as we have seen recently in the United Kingdom – that will add more cost to consumers.”

AGL Energy head office building. Picture: NCA NewsWire /Brendan Beckett

It comes as energy retailers across the country flagged rising prices by as much as 130 per cent.

The changes, which will impact residents in NSW, Queensland and South Australia, could come into effect as early as next month.

Last week, alarmed customers received notices from their energy providers that rates were about to spike.

These price hikes come amid soaring wholesale prices over the last year, which have risen on average by 141 per cent.

The price of black coal and gas are largely to blame, which have more than doubled in that period of time, according to consumer network One Big Switch.

One Big Switch spokesman Joel Gibson said: “We’re going to see more and more price hikes over the coming weeks and we can only hope they’re not all at this level.

“It’s so important this year that households look out for their price hike letter and read it carefully because their plan could be almost doubling in price and they might be able to save hundreds of dollars simply by switching.”

It’s bad news for customers at several energy retailers. Picture: iStock

Discover Energy last week emailed customers warning them rates were about to change.

In NSW, their customers’ energy bills would rise by 80 per cent while in South Australia, that number skyrocketed to 95 per cent.

To top that off, Discover customers can expect to see their supply charges rise by 45 per cent in South Australia, and by an eye-watering 130 per cent in NSW.

Meanwhile, Mojo Power emailed its NSW customers to let them know their usage rates would rise by 58 per cent.

However, in some good news, Mojo Power added that their customers’ daily supply charge would drop by 29 per cent.

Another energy retailer, ReAmped, emailed its NSW customers about a 43 per cent increase.

This would raise their annual bill by around 28 per cent or $273 for a typical home, according to modelling from One Big Switch.

Queensland residents are also feeling the sting, with LPE contacting customers to warn them rates would double.

“We are increasing your usage rate by over 100 per cent,” the letter read.

Disappointed customers were directed to government-backed Ergon Energy if they were unhappy with their rates.

Origin Energy has indicated it will be raising rates by next month. Picture: Ian Waldie/Bloomberg

Energy Australia along with two other retailers have not revealed how much they are raising rates by.

Although these companies are all lesser-known power retailers, several of the major retailers are also planning to raise prices.

Origin, AGL and EnergyAustralia have indicated they will hike their rates by mid-June, but have not said by how much.

Cost of living keeps on spiralling

Earlier this month, the Reserve Bank of Australia had to raise interest rates for the first time in more than a decade as inflation hit 5.1 per cent.

Houses have never been more difficult to buy for Australia’s young and low-income population.

The nation is also experiencing a rental crisis, with too many renters and not enough stock to go around, prompting heavy competition and inflated prices.

For several weeks in March, Australians were also caught up in a petrol crisis, with a litre soaring over $3 in some places.

A fuel excise cut was introduced to offset this. However since then fuel prices have been creeping back up with issues caused in part by Russia’s invasion of Ukraine.

Originally published as Cost of living crisis: Energy bills to increase as much as 130 per cent