Households across Australia will soon be facing higher electricity prices according to the Australian Energy Regulator. The AER released its draft default offer on Wednesday morning, which sets the cap on the maximum price retailers can charge customers in NSW, South, Australia and South East Queensland. This could see electricity prices rise by as much as 30 per cent for customers in these states.
The AER’s draft default offer is the result of a series of changes to the electricity market in Australia, which have been implemented over the last few years.
These changes have seen the wholesale cost of electricity rise, which in turn has been passed on to consumers in the form of higher electricity prices.
The AER’s draft default offer sets a cap on the maximum price retailers can charge customers, which is intended to protect consumers from any further price increases.
Small business customers can anticipate price hikes ranging from 14.7 to 25.4 percent, whereas increases of between 19.5 and 23.7 percent might be expected in various states and with different providers.
Approximately 600,000 people in South Australia, New South Wales, and South East Queensland are on the default offer.
Clare Savage, the chair of AER, commented the price increases were considerable, but if the government hadn’t stepped in, they could have risen as much as 50 percent.
“The estimates of a 40-50% price increase were alarming, as they ranged between 35-50% during that time,” she told the ABC.
On Wednesday, Victoria released its draft offer with proposed increases of 30 per cent for households and 31 per cent for small businesses from July 1.
This offer, which is separate from the electricity price cap, affects approximately 400,000 Victorian households and 55,000 small businesses on the default offer and was proposed by the Essential Services Commission.
A typical household bill will increase from $1403 to $1829 annually, according to the ESC, while small businesses should anticipate a rise from $5620 to approximately $7358.
