Struggling Victorian households battling in the face of rising power prices

Victorian households get some of the worst deals in the nation, despite being the lowest users of power. New figures show struggling families are paying up to $1 out of every $7 in income just to pay their energy bills.

Struggling families in Victoria are spending up to $1 out of every $7 of disposable income on power bills, a new report has revealed.

New figures indicate that in Victoria, wholesale electricity prices, some of which flow on to customers’ bills, have jumped by 14 per cent in the past year, a rate well above inflation and wage growth.

The first Power Price Scorecard for Australia’s states — ranking a range of factors relating to energy affordability — shows that despite being the lowest users of power Victorian households have among the worst deals nationally.

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The state’s long-term reliance on gas for hot water and cooking, which has traditionally kept electricity usage low, has deflected attention from the high cost of that electricity, the report found.

The report, by Australian Power Project founder Nathan Vass, found Victoria had the most expensive wholesale electricity costs, which have risen dramatically since the closure of Hazelwood in 2017.

The average household’s annual power bill was $1457, up from $1088 in 2007-08.

Mr Vass also said struggling Victorian families were not convinced by the big energy companies’ “discounts” and slick advertising campaigns.

Last year the Australian Competition and Consumer Commission found that in the decade from 2007-08 to 2017-18 Victorians had a price rise of 56 per cent in real terms. The average household’s annual power bill was $1457, up from $1088 in 2007-08.

Mr Vass said price increases had led to “bill shock” and energy poverty. “Victorians have the lowest electricity usage … and the second worst value for money,” he said.

A report late last year from St Vincent de Paul found Victorian households on the worst electricity deals in the market were paying almost $1000 more each year for the same amount of power as those on the best offers.

The analysis found that homes in low socio-economic areas, including the Latrobe Valley, Seymour, Wangaratta and Wodonga, were facing some of the highest-cost energy offers in Victoria.

But energy industry experts believe a federal ultimatum to retailers to slash prices is likely to reduce the bills of thousands of Victorian households by up to $560 this year, as energy companies finally pass on savings to loyal customers.

Major energy companies including Origin, Energy Australia and AGL have all removed their “loyalty tax” — which punished customers who stuck with the one retailer — following pressure from the Morrison Government.

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