Australia: The price of electricity increased “vertically”, in some cases increased by 130%

The Australian Energy Regulatory Authority (AER) on May 26 announced that it would increase standard electricity prices, specifically by 18.3% in New South Wales (NSW), 12.6% in Queensland and 9.5 % in South Australia.

The increase in electricity prices will take effect from July, making it possible for consumers to spend an extra $250 a year in some cases. Clare Savage, president of AER, said the decision to raise prices was “particularly difficult” but advised customers to weigh their spending to get the best price.

Millions of Australians are about to suffer the shock of rising electricity prices from July. Photo: iStock

“In setting new prices to default market rates (DMOs), we understand the significant impact they will have on some consumers who may be struggling,” said Ms. Savage. If a large number of retailers are unable to recover their costs and are forced out of the market – as we have seen recently in the UK – it will cause further cost to consumers”.

The DMO was set up in 2019 for consumers who didn’t choose a “price safety net”. The DMO incentive serves as a price cap for residential and small business customers on how much energy retailers can charge customers for electricity on default plans.

Rising gas and coal prices globally have also contributed to a surge in wholesale electricity prices to record levels. Repairs and decommissioning of up to a third of coal-fired power plants have also contributed to the recent spike.

Outages at some plants and soaring coal prices have sent wholesale prices soaring. Photo: ABC

AER says since the most recent DMO lift, wholesale costs for retailers have increased by 49.5% in Queensland, 41.4% in New South Wales and 11.8% in South Australia. This increase is due to a reduction in thermal power plant output due to unplanned power outages and higher coal and gas prices, slowing investment in new capacity and increasing demand driving up costs. electricity wholesale contracts for retailers.

By page News.com.au, the new price hike was announced amid a spike in wholesale prices year-over-year, averaging a 141% increase. According to consumer network One Big Switch, the price of black coal and gas has more than doubled in the same period.

Since last week, Discover Energy, which specializes in providing electricity and gas service packages, has warned customers that electricity prices will change. In NSW, a customer’s electricity bill will increase by 80 per cent while in South Australia that figure soars to 95 per cent.

Discover Energy customers could see electricity service charges increase by up to 45% in South Australia and 130% in NSW.

Earlier this week, energy products retailer Weston Energy announced it could no longer supply gas to customers as agreed. Regulators were forced to apply the retail law for the first time in six years to switch affected customers to alternative suppliers.