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Some Australian households are facing power price hikes of up to 100 per cent as the "long tail" of last year's energy crisis hits home hard, according to consumer advocates.
Key points:
- Benchmark power prices will rise 20-25 per cent across Queensland, NSW, Victoria and SA from Saturday
- Consumer advocates warn tariffs could jump much higher for customers on expiring competitive deals
- Energy providers say it has never been more important for households to shop around for the lowest price
Under decisions by energy regulators, benchmark electricity tariffs will increase between 20 and 25 per cent across south-east Queensland, New South Wales, Victoria and South Australia.
The increases come into effect on Saturday, the start of the new financial year.
Joel Gibson from consumer group One Big Switch said that while the headline numbers were bad enough, many customers whose deals were expiring faced much worse.
Mr Gibson said there were reports some households' power prices were set to double as cheaper offers lapsed and the huge costs incurred last year finally washed through.
"What we're about to see is probably an average 25 per cent power price hike right across the eastern and southern states of Australia," Mr Gibson said.
"And, in fact, in some cases people are getting much, much higher increases — 50, 80, even 100 per cent in some cases.
"Unfortunately, this is the long tail of the chaos in the wholesale market that we saw last year."
'Middle Australians to get hit hardest'
Record fuel prices helped propel electricity markets to unprecedented levels last year, at one stage prompting authorities to suspend normal operations to stop things from spiralling out of control.
Mr Gibson said the bill for the turmoil was now being paid but it was coming at the worst possible time for many households who were already grappling with rocketing costs of living.
He said $3 billion of combined assistance from state and federal governments would help ease the pain for many consumers, although it would not shield everybody.
"I think it's going to hit particularly those households that don't necessarily have access to concession cards or other rebates, that don't necessarily qualify, but aren't necessarily high-income households," he said.
"So, it's middle Australians that are going to get hit hardest of all by all these increases because they may not qualify for any of those extra rebates or assistance that's coming.
"And yet, they're going to get, probably, a $500 to a $1,000 increase in their energy costs at a time when their insurance premiums are going up, their mortgage rates or their rents are rising.
"So, it's this cumulative impact, this perfect storm, of price rises across the board that's going to make it very, very hard for medium-income families over the next six to 12 months."
Energy producers have acknowledged that some consumers could be hit with outsized price rises but pointed to the benchmark increases as the best gauge of the market..
Cheaper deals 'harder to find'
Sarah McNamara, the chief executive of industry lobby group the Australian Energy Council, said the size of a customer's price increase would depend on the type of deal that was expiring.
For those on historic deals, Ms McNamara said the going was likely to be tougher given the extent to which wholesale electricity costs had risen in the meantime.
She pointed out that as many as eight individual energy retailers had gone to the wall since March last year, significantly reducing the amount of competition in the market.
"And that's really disappointing for their customers and for the employees and for the market generally, although I will say they were in the main smaller retailers," Ms McNamara said.
"But what that is evidence of is the financial pressures that all retailers across the market are operating under.
"And that does mean it is getting harder for retailers to offer really super cheap deals that customers might have enjoyed two or three years ago."
Despite this, Ms McNamara urged consumers to shop around for the best offer, explaining that the exit of some retailers "doesn't mean there aren't any good deals out there at the moment".
"And what we think is really important in an environment of rising prices is households and small businesses are making sure they're on the best deal for their circumstances," she said.
"And the easiest way to do that is to ring your retailer and just ask."
Mr Gibson agreed, saying customers could be costing themselves hundreds of dollars per billing cycle by failing to haggle or switch providers.
"It's fair to say it's never been more important that people are prepared to switch providers and plans in the states where they can than it is at the moment," Mr Gibson said.
"We haven't seen this sort of cumulative price rise two years in a row ever in living memory.
"And some people, frankly, if they don't switch plans and providers are going to pay $1,000 more than they have to next year for their energy bills."
'We're stuck on a treadmill'
Christian Legg, an Adelaide IT worker, is one of those customers whose bills are set to soar over and above the benchmark rate.
Mr Legg said he had been notified by his provider, AGL, that his tariffs would increase by almost 50 per cent from July.
"I was aware of what was happening in the industry with prices going up," Mr Legg said.
"And I knew that these days would come.
"But I was quite shocked when I received my notification from my power company saying that my raw power price was actually going up by 47 per cent and my supply charge was going up by 49 per cent.
"So, I don't know how they did the maths on that."
The increases are set to hit Mr Legg and his family particularly hard.
The 54-year-old has been the sole income earner since his wife was affected by health problems several years ago.
What's more, he said, her condition meant they had a heavier reliance on energy for heating and cooling.
Mr Legg said they were already cutting back on usage where possible, and he was worried about what lay ahead.
"The thing is, even though our usage remains constant, the price just keeps going up," he said.
"And even if we do get some savings on our usage, they're eroded by the increases that seems to be on an annual basis.
"In a developed country where electricity should be a right not a privilege, to not have sufficient heating in the day is a concern for me and for my wife."