400,000 Victorians to be hit with huge winter power bills

Victorians have been warned of a “cold and expensive” winter as hundreds of thousands of households are set to be hit with massive price increases on their power bills.

Victorians are in for bill shock when they receive their winter power bills.

Victorians have been warned of a “cold and expensive” winter as about 400,000 households in the state become the first to be hit with whopping 25 per cent power bill hikes.

Changes to Victoria’s default offer, a regulated safety net for those who don’t shop around, will come into effect on Saturday with significant price increases.

Under new limits set by the Essential Services Commission, the typical household will now pay an average $352 more per year, surging by 25 per cent from the year before.

About 400,000 people are on default offers and similar changes will kick in for the rest of the state on August 1 when retailers alter their more competitive deals.

The whack to hip pockets comes after steep hikes to gas prices in February and as consumption of electricity and gas soars over the cold winter period.

Policy manager at St Vincent de Paul Society, Gavin Dufty urged those with energy bill difficulties to call their retailer as soon as possible.

Assistance can include debt waivers, payment plans and options for cheaper energy rates.

Government support programs and concessions for those on healthcare or pension cards are also available.

“It’s likely to be a long, cold and expensive winter and now is the time to set yourselves up so you’ve got the lowest cost possible,” Mr Dufty said.

“For those that haven’t already claimed the Victorian government power saving bonus, jump on the Victorian government energy compare website and make sure you get that $250.

“And of course shop around and make sure you’re on the best deal for you.”

From August 1, retailers will also alter their prices for nearly 1.5 million households who are not on default offers.

The state’s three biggest retailers, EnergyAustralia, Origin and AGL, will all increase their prices by more than 25 per cent.

These companies, along with smaller retailers, use the ESC’s default offer advice as an important consideration when setting prices.

Bills hikes have been largely driven by the surging cost of wholesale electricity generation, including market pressure from the war in Ukraine and the breakdown of multiple coal-fired power stations.

The federal government capped prices to rein in the crisis but this is not expected to filter through to bills for another year when retailers negotiate new contracts with generators.

On Thursday, Today show host Karl Stefanovic confronted federal Treasurer Jim Chalmers over the nation’s cost of living crisis.

“The reality is food, power and housing is causing grief across the length and the breadth of the country,’ he said during an interview.

“Even your childcare subsidies will be swallowed up by inflation.

“People are losing faith in the government’s ability to handle this crisis. Have you got this?”

Dr Chalmers said inflation was hanging around longer than he would like but said the government was handling the situation and providing support through energy bill relief and its cheaper child care policy.