Power bills set to soar in Victoria, with more pain to come

Power bill pain is set to add to the growing cost-of-living pressures being faced by Victorian families. See how much more you’ll soon pay.

Victorians reeling from the rising cost of living will soon face power bill hikes of about $60 a year.

The Essential Services Commission has approved an average 5 per cent price hike in default “no frills” electricity deals from July 1, due to soaring wholesale energy costs.
The ESC says households on those regulated deals would see bills rise an average of about $61, while small businesses will cop an average hike of $270.
The consumer pain follows massive hikes to the price of petrol and food, which are causing stress across many households and dominated the federal election campaign.

Energy analysts warn unprecedented wholesale electricity price increases fuelled by war, floods, and major power station outages, could see competitive energy deals most Victorians have – which are typically lower than default deals – rise by more than $61.

Victorians are facing rising cost of living pressures, with grocery and fuel prices already soaring. Picture: David Crosling

Energy Systems Research Fellow at the University of Melbourne, Dr Dylan McConnell, said if the gap narrowed significantlym then some Victorians may shift on to regulated tariffs.

“You would expect the gap to probably reduce given what’s going on but we don’t know that until (companies) start to reprice,” he said.

Warnings have also been issued about small retailers, which rely on offering cheaper deals and have greater exposure to wholesale price fluctuations, being under pressure to survive.
Grattan Institute energy program director, Tony Wood, said wholesale costs – which account for about a quarter of a total household bill – had more than doubled so a 5 per cent hike in bills would be difficult for some companies to manage.

“This is unprecedented, what we are seeing with increases in wholesale,” he said. “Indications are it may not be (the last bill hike).”

The ESC decision will impact households with a default tariff – which is effectively a safety net for those without a better offer – differently depending on where they live.

Customers in AusNet’s distribution area will be whacked with an average $138 increase, partly blamed on bushfire and storm costs, while CitiPower customers face hikes of $15.

The Andrews government tried to get in ahead of looming price pain in its state budget, offering a $250 “power saving bonus” for households who visit a government energy comparison website from July 1.