Looming power bill shock will hit households up to $1000 a year

Electricity prices are about to soar – and households have only weeks to lock in new contracts before they’re hit, they’ve been warned.

South Australians have only weeks to lock in new electricity contracts before they are hit with price rises of up to $1100 a year, with gas bills also set to skyrocket.

The flow-on effects of the national energy crisis are expected to add to regular July price increases for householders, when those re-signing are likely to suffer.

In the worst SA case so far, consumer advocacy group One Big Switch says one small retailer told a customer their usage rate would increase by 95 per cent, which would add $1098 to the annual bill of a typical home.

St Vincent de Paul energy expert Gavin Dufty said market offers were likely to increase by about 15 per cent in coming months. He said householders should take advantage of the widespread removal of exit fees from the industry and switch to cheaper contracts.

Mr Dufty said homeowners should quickly sign on for “anything that looks close to your current bill”, even if that meant switching providers.

“Gas retailers will also start to reprice their offers from July with probably a 10 per cent-plus increase,” he said.

Mr Dufty urged householders to log on to energymadeeasy.gov.au, the federal government’s free utility best bill price calculator.

The energy crisis has been caused by the perfect storm of pressures on electricity production and gas supply.

Electricity bills will increase sharply from July 1.

The cold snap across southeastern Australia, outages at coal-fired power stations, the collapse of a gas supplier and sanctions on Russia have combined to fuel a sharp increase in the wholesale price of gas.

The spot price was already rising due to increased global demand as countries transition from using Russian gas and coal in response to its invasion of Ukraine.

The local supply shortage has developed despite Australia being one of the world’s biggest producers of liquefied natural gas.

Much of it is exported and more is now being used for power production.

“Some of the (power) companies are already pulling out of the market and closing to new customers,” Mr Dufty said. “There are so many people changing companies that the smaller retailers have not bought enough on their books to be able to sell to new customers.”

One Big Switch spokesman Joel Gibson agreed, saying discount options were narrowing by the day as the small retailers stopped accepting new customers.

Householders have been logging their projected bill increases with One Big Switch. The highest so far has been in NSW, set by Discover Energy. It is adding $1563 to an average annual bill.

The market is eagerly awaiting price offers by large retailers AGL, EnergyAustralia and Origin, which are better able to cope with price pressures because they also own power generation facilities.

Australian Industry Group SA head Jodie van Deventer said local businesses were being seriously hampered.

“High energy users whose fixed-term contracts will soon be up for renewal will be forced to pass those costs on or come under dire pressure,’’ she said.

In the worst known impact so far in SA, major iron foundry business Intercast and Forge general manager Brett Lawrence said staff had been sent home for much of this week because of high electricity prices.

He said the Wingfield company was tied to the spot price and could not continue production when prices hit a pre-set ceiling.

“This is the worst we have ever seen,” he said. “Electricity prices are three times as high.”

Originally published as Looming power bill shock will hit households up to $1000 a year