Electricity prices set to soar by 20 per cent in some states
Households and small businesses in three states are set to be hit by a major hike in the cost of their power bills from July after the nation's energy regulator flagged higher benchmark prices for retailers.
The Australian Energy Regulator (AER) today unveiled a draft electricity price increase of 20 per cent to 22 per cent for the default market offer (DMO) over the coming financial year.
The DMO is the maximum price providers give to consumers on standing deals who haven't searched for a more competitive deal.
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Power bills are forecast to rise by about 20 per cent for customers in NSW, South Australia and parts of Queensland, the energy regulator said today. AAP
It is estimated residential customers will rise by 19.5 per cent to 23.7 per cent, depending on their state.
And small business customers could face price increases from 14.7 per cent to 25.4 per cent.
The price hikes will affect about 500,000 customers in South Australia, New South Wales and South-East Queensland.
Customers in Victoria and Tasmania are part of a different process and Western Australia and the Top End are on a different market.
AER Chair Clare Savage said the DMO was equally about protecting the consumer as it was about ensuring that energy retailers could stay in business.
"We know many households and businesses are already struggling with cost-of-living pressures. This is certainly a challenging environment for people to hear that further electricity price rises are on the horizon," she said.
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Energy prices have soared over the past 18 months. Getty
"Energy prices are not immune from the significant challenges in the global economy right now. That's why it's more important than ever that we strike a balance in setting the DMO to protect consumers as well as allowing retailers to continue to recover their costs and innovate."
Savage advised customers to shop around for the best electricity price offer and use the AER price comparison site at www.energymadeeasy.gov.au.
The AER will announce a final pricing calculation in May to come into force on July 1.
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