Why Aussies can expect to be slugged with higher power bills this year

Thousands of Aussies will be hit with higher power bills this year despite the ongoing cost-of-living crisis and fallout of ex-Cyclone Alfred.

The Australian Energy Regulator (AER) published its draft decision on Thursday, which will see price caps for customers on standing retail plans jump by almost nine per cent from July 1.

‘We know that cost-of-living pressures are front of mind for many households and small businesses,’ AER Chair Ms Clare Savage said.

The report means residential electricity customers from NSW, South Australia and southeast Queensland will see price rises between 2.5 and 8.9 per cent compared with the last financial year.

Inflation-adjusted annual price increases of between $60 and $140 can be expected, depending on the area. Small business customers could be hit with price gains of between 4.2 and 8.2 per cent.

The regulator, which sets default prices in the three states, said both higher wholesale market and network costs were the reason behind the sudden price hike.

Average wholesale market spot prices increased across 2024, driven by high demand, coal generator and network outages, and low solar and wind output that caused ‘high price events’ in the relevant states. 

The spike in bills comes following the sobering news that tens of thousands of Queenslanders will remain without power for even longer.

Energex said inspections of the worst-affected remote areas showed that all the infrastructure needed to be rebuilt after the damage of ex-Cyclone Alfred

The majority of the homes and business that were in the firing line of ex-Cyclone Alfred have been without power since last Thursday.

Energex said 410,000 of the 450,000 homes that lost power have been reconnected.

But the energy provider warned that some without power could be waiting for some time as infrastructure in the worst-affected remote areas is rebuilt. 

Ms Savage acknowledged that energy customers are doing it tough, particularly those impacted by Alfred. 

‘This is a very difficult time for many communities across northern New South Wales and southeast Queensland who have been or remain without power following ex-Tropical Cyclone Alfred,’ she said. 

The regulator is expected to finalise the offer in May.

Energy bill relief has been insulating households and businesses from price pain, with speculation the federal government will extend its subsidies on March 25.

Regulators kept default offers fairly stable last financial year, in welcome reprieve following sharp increases in the years prior triggered by Russia’s invasion of Ukraine pushing up wholesale prices.