EnergyAustralia hits customers with double-digit price hikes
Customers with one of Australia’s biggest power providers will see their electricity bills soar by over $300 a year as EnergyAustralia blames the “perfect storm” for the move.
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EnergyAustralia household and small business customers in three states and one territory will be slugged with double-digit electricity price hikes, amid a “perfect storm” of inflationary pressures, the operator says.
In what will be a heavy blow for Australians dealing with three-decade high inflation and a looming ninth consecutive interest rate hike on Tuesday, the price rises due to come into effect from March 1 will see households pay over an extra $300 a year.
EnergyAustralia chief customer officer Mark Brownfield blamed the increases on a combination of coal supply shortages, wet weather and the ongoing war in Ukraine which had driven up wholesale prices.
From next month, Queensland users will pay 14.1 per cent or $301 per year more on average, while NSW has been hit with a 12.4 per cent or $276 per year increase.
South Australian customers faced a 10.9 per cent or $252 per year jump and in the ACT, prices would be upped 10.2 per cent.
“We know these price rises won’t be welcomed with households already experiencing cost of living pressures,” Mr Brownfield said.
“At the same time, we are continuing to work hard to introduce as much fuel and generation supply to the system as possible. We know increased supply of electricity helps avoid high wholesale costs, particularly at times of peak demand, and in turn this reduces pressure on retail electricity prices.”
Small business customers will have smaller rises on a percentage basis, but larger in dollar terms. Queensland business owners will see a 12.5 per cent rise or about $641 per year, a 9.2 per cent or around $604 per year on average increase in the ACT and a 9.7 per cent or $522 per year hike in NSW. South Australia small business tariffs are due to rise by 9.7 per cent or $516 per year on average.
It comes as Federal Climate Change and Energy Minister Chris Bowen told the Cost of Living Select Committee on Friday that wholesale electricity prices in February were $120 megawatt hour in NSW and $110 in Queensland, which was nearly half of what the October budget had forecasted for 2023-24.
This followed the Albanese government’s intervention in the energy market with the introduction a price cap on coal and gas in December in a bit to lower power bills.
Treasury had warned last year that power prices would jump by 56 per cent in the next two years
It estimated that households would be $230 per year better off in 2023-24 under the price caps. The potential benefit was made on assumption by the government officials that prices will rise 23 per cent in the year ahead instead of 36 per cent without the measures.
“We acknowledge recent government intervention aimed at lowering the wholesale price of coal and gas over the medium term. We are working with governments and with coal and gas producers to implement these interventions to help minimise future impacts on retail prices for customers,” Mr Brownfield said.
Origin Energy told The Weekend Australian it had no immediate or current plans to increase electricity tarrifs after it increased gas prices on Wednesday.
Electricity prices were one of the biggest drivers behind a hotter-than-expected 7.8 per cent increase in inflation over the December quarter. The Australian Bureau of Statistics noted domestic holiday travel and accommodation was the main contributor, up 13.3 per cent, while electricity was second at 8.6 per cent.
The Australian Energy Regulator warned in November that energy prices would remain high for the next two years as wholesale gas prices doubled in the September quarter and electricity peaked at the second-highest level on record.
It latest quarterly report for the September period showed electricity wholesale prices jumped to an average of $233 per megawatt hour across NSW, Victoria, Queensland, South Australia and Tasmania, more than triple the $66MWh average from 12 months ago.
Rising costs was hurting smaller electricity retailers juggle their exposure to high and volatile wholesale electricity prices and could lead to less competition and higher power bills, the Australian Competition and Consumer Commission said.
Most big energy users can manage their exposure to wholesale power price spikes by entering hedge contracts that lock in firm prices or signing up to contracts at a specified rate.
However, six electricity retailers have quit the market in 2022 and others have told customers to switch retailers or are no longer taking on new accounts.
Byron Bay junior electricity operator Enova Energy was one after it collapsed in June, with its chief executive slamming the “diabolical” state of the energy market as broken and unable to support small retailers amid soaring prices.
Originally published as EnergyAustralia hits customers with double-digit price hikes
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