Energy prices predicted to rise by 20% – when will you be affected?
We're about to face a repeat of last year's energy price hike in July and possibly some of the trends that followed before and after.
The Australian Energy Regulator (AER) is poised to reveal at least a 20% hike in benchmark energy prices next week for the 2023/2024 period. This follows an increase of up to 18.3% just last year.
It will impact households in New South Wales, South East Queensland and South Australia from 1 July, right during the peak of winter.
Those living in Victoria and Tasmania will have their own processes. Western Australia and Northern Territory operate separately and aren't impacted the same way as the east coast states.
This is what the percentage price hike for impacted states looked like in July 2022:
- New South Wales: Up to 18.3%
- Queensland: 12.6%
- South Australia: 9.5%
- Victoria: 5%
- Tasmania: 11.88%
The benchmark pricing, also known as the default market offer (DMO), is the maximum price energy retailers can charge customers that are on standing offers.
Those on standing offers are usually households that haven't shopped around for a better energy deal.
You could be on a standing offer if you haven't switched energy plans in over 12 months. Start comparing plans in your area for a better offer.
Will we see a repeat of trends from last year's energy price hikes?
Last year, some retailers increased their market offer prices ahead of the July increase and then in the following months. Some even closed shop permanently.
We're seeing the trend in rising prices continue across both electricity and gas in the first quarter of 2023.
"While the increase in the default market offer will not affect many customers, it forewarns that price increases for electricity market offers are in the pipeline," St Vincent de Paul executive Gavin Dufty told Finder.
We strongly encourage households to be vigilant on notifications from their retailer of price changes, and when these notifications occur, ask your retailer that it is the best deal they can offer you. However, we also encourage people to shop around.
Dufty also wants disadvantaged or vulnerable households to make sure they're getting their concession entitlement.
"Reach out to your energy retailer for more help. If you are having difficulties paying your bills, they are obliged to help you as part of the regulatory framework. Help can include energy use information, putting you on the best offer provided, billing and payment arrangements and other support," said Dufty.
As reported by the ABC, Energy Consumers Australia's chief executive officer Lynne Gallagher explained that the impending energy price hike is in a way a delayed reaction to last year's crisis.
We saw the wholesale electricity market soar to its highest levels in 2022 and the market as a whole is still trying to cope.
We'll give you more updates next week when the AER releases its DMO draft. For now, compare energy plans and see if you're getting the most bang for buck.