SA homeowners and businesses face new power price costs as AER releases report

Homes and businesses are facing new power bill hikes as Australi’s energy regulator reveals how much more it’s going to slug you this time.

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Power costs are set to rise with South Australian homeowners facing an increase of up to $114 a year and businesses a 6.6 per cent hike, prompting one well-known juice manufacturer to say businesses operating in Australia deserve “a gold medal”.

On Thursday, the Australian Energy Regulator published its draft 2025-26 “default market offer” (DMO) prices for NSW, South Australia and southeast Queensland, showing small businesses in SA were set to pay an extra $355 more a year.

The news is a blow to Prime Minister Anthony Albanese as he faces down cost of living pressures before the federal election and his broken promise to cut bills by $275.

Nippy’s juice and milk manufacturing chief Ben Knispel said the threat of further power rises was another blow to struggling businesses.

Joint managing director Ben Knispel at Nippy’s Regency Park warehouse says higher power prices are one more blow to struggling businesses. Pic RoyVphotography

“Any owners running a business in Australia that pays all of their staff again on Monday morning and all of their suppliers on Monday morning, they deserve a gold medal, running a business in this country at the moment is not an easy thing,” the joint managing director of the Knispel Group said.

Rising power prices had hit Nippy’s two Riverland factories and its Regency Park warehouse for the past four to five years with power costs about $100,000 in a bad month and significantly less when the sun was shining for renewables.

But what also kept Mr Knispel “awake at night” was the current struggle to find staff, rental properties for staff in the Riverland and the global rise in the cost of orange juice that was triggering a fall in sales.

News of a flagged power price rise incensed SA opposition energy spokesman Stephen Patterson who claimed the state government had failed South Australians by focusing its efforts on the now-shelved hydrogen plant rather than finding other ways to lower power prices.

Business SA chief executive Andrew Kay was concerned many would pay even higher power bills than those flagged by the AER. Picture: Dean Martin

“This is the fourth Default Market Offer report released by the AER under the Malinauskas Labor Government and over this time since 2021 power bills for households have gone up by as much as $804 or 39 per cent,” he said.

According to the AER, the fastest rising component of bills is retail costs, surging by 20 to 41 per cent, however, retail costs are one of the small parts of overall charges.

The Default Market Offer is a “safety net” maximum price that retailers can charge their customers who do not shop around for a better deal, and is also a benchmark that must be used for other market offers.

There are about 60,000 SA households and 16.5 per cent or 14,418 small businesses on the DMO.

SA Business Chamber chief executive officer Andrew Kay said many small businesses outside the DMO were paying even higher bills and the cost of power was flowing through to consumers onto supermarket shelves.

He called for clarity for small businesses trying to navigate energy contracts.

Energy Minister Tom Koutsantonis addressing the media during a visit to the Whyalla steelworks. Picture: NewsWire / Tim Joy

SA Energy Minister Tom Koutsantonis said the draft offer released today saw SA “shielded from higher price increases experienced in other jurisdictions” with NSW small business costs set to increase by up to 8.2 per cent.

“However, the State Government is disappointed to see the significant gains of last year’s final Default Market Offer wound back, and will continue to work with the AER to advocate for the best possible offer when the regulator hands down its final determination later this year,” Mr Koutsantonis said.

He blamed former Liberal governments for selling state-owned generation “making South Australians susceptible to Australia-wide price increases” and called for national policy certainty to encourage private investment and ensure greater competition particularly for low-cost renewables and “firming gas”.

“The state government has introduced a Firm Energy Reliability Mechanism (FERM), whereby long-duration firm capacity generators annually tender for contracts that underwrite a portion of their revenue.

“This framework will support sufficient long-duration firm capacity to ensure secure, reliable and resilient electricity supply for South Australia, at least-cost to consumers.”

Alimentary Eatery owners Deeb and Andrea Milky at Jetty Road, Brighton. Picture: Ben Clark

Brighton businesses reel after another bill surge

By Karen Grace Prince

Small businesses in the seaside suburb of Brighton say they are feeling the heat after the Australian Energy Regulator’s price hike announcement.

Deeb Milky co-owns the Alimentary Eatery along Jetty Road with his wife Andrea and said energy bills have doubled over the years — close to $4500 a month.

“Obviously we’re a small business and I’m all about giving people jobs but when we have to try and save money, the most tangible thing we can play with is wages because rent’s a fixed price,” he said

“Electricity is fixed and it always goes up, and there’s only so much we can do with stock and stock wages”.

Mr Milky said electricity prices have “tipped the iceberg” since opening the cafe 7 years ago.

This comes more than years after the government promised to reduce electricity prices by $275.

“I don’t think (the Prime Minister) has done anything to help small businesses at all. If anything, he’s made it ten times harder,” Mr Milky said.

“It wouldn’t make a difference anyway. From $4,000 to $275, it’s nothing”.

C.R. E. A. M cafe-owner, Joshua Rivers said the consistent price hike over the past 10 years “makes Covid look like a dream”.

“This is the worst time in modern hospitality history ever. We can’t raise our prices to offset the hikes set upon us because the customer doesn’t have that sort of money to spend, so we’re in a pressure cooker,” Mr Rivers said.

C.R. E. A. M cafe owner Joshua Rivers. Picture: Ben Clark

“It’s very well known that small businesses are having their teeth kicked in by the government every other night.

Mr Rivers said he pays about $7000 every 3 months solely for electrical bills.

“$275 is a laughing matter. That’s a joke. (The Prime Minister) is so disconnected,” he said.

“It's nothing, it’s like one table worth of people ordering food. It doesn’t do anything, it barely comes to the service.”

Another business owner said the increase would hit them in winter “when no one comes to the beach”.

“To have a price hike when we’re also not having the sales, it’s going to dramatically affect us because then that’s an extra added cost with no additional income,” the business owner said.

“We’re already feeling the pinch this year, so it’s going to be really difficult.

Originally published as SA homeowners and businesses face new power price costs as AER releases report