Hundreds of thousands of households face higher power bills after the energy regulator proposed lifting benchmark prices by up to 9% in some regions.
The move prompted the energy minister on Thursday to concede power bills are “too high” and urge users to shop around for the best deal, while the opposition branded the price rise a failure of Labor’s energy policy.
But opposition leader Peter Dutton wouldn’t guarantee power prices would be lower if he won the coming election.
Dutton also declined to say whether he would back a further extension of $300 rebates for household energy bills, which the Labor government is expected to outline in its federal budget later this month.
Caps on what regulators can charge households and businesses in New South Wales, South Australia, south-east Queensland and Victoria are refreshed every year.
The default market offers or DMOs, as they are known, are due to come into effect in July.
The safety net prices differ by region. According to the draft caps issued on Thursday, residential electricity customers from NSW, South Australia and south-east Queensland will get price rises between 2.5% and 8.9% compared with the last financial year.
Inflation-adjusted annual price increases of between $60 and $140 can be anticipated, depending on the area.
Small business customers could see price gains of between 4.2% and 8.2%.
Victorian benchmark prices are set by a separate state-based regulator. There, residential customers can expect a $12 increase – less than 1% – averaged across the five regions.
The state’s Essential Services Commission said some customers might see their annual prices fall by $19 but others faced a $68 hike, depending on location.
Small businesses on Victoria’s default offer are heading towards a 3% price increase, or $104, on last year.
Chris Bowen said that, overall, power bills “remain too high”.
He encouraged households to shop around for the best deals, which are often significantly below the regulated caps.
“While today’s news is mixed, it does show energy retailers are responding to competition – with energy plans that are 25% cheaper than the DMO, it’s worth shopping around,” he said.
Bowen said 80% of households were not on the cheapest energy plan they could be, “which is why we’re making it easier for households to find and switch to better plans”.
The shadow energy minister, Ted O’Brien, claimed the “skyrocketing” price rise was a symptom of Labor’s energy policy having “failed”.
“Three years ago, Anthony Albanese and Chris Bowen promised cheaper power bills. Instead, they’ve delivered among some of the highest electricity prices in the world,” he said in a statement.
“Chris Bowen’s own electorate in Western Sydney is hardest hit with some households set to pay over $1,300 more than Labor promised. Bowen is driving up power prices, pushing businesses to the wall, and leaving Australians worse off.”
O’Brien was also critical that greenhouse gas emissions were not falling quick enough for the government to meet its 43% emissions reduction target, and that the renewable energy rollout was “stalling”.
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Energy bill relief from federal and state governments has been insulating households and businesses from price pain, with speculation the federal government will extend its subsidies in the budget on 25 March.
In a press conference, Dutton wouldn’t say whether he thought the government should again offer that assistance, or if the Coalition would extend it if he came to power in this year’s election. He claimed such subsidies could amount to the government “just chasing its tail here” when weighed against inflation fears.
“When you tax and spend, you drive up inflation, and if you do that, you can keep giving $300, but as we see today, you then push electricity prices up by $1,300,” he said.
Dutton also would not guarantee energy prices would be lower under a Coalition government, but said he was worried about rising power bills flowing through to the price of groceries and essentials.
“We will have more to say about energy policy,” he said. Dutton again pointed to his nuclear plan, repeating his discredited claim that the rollout of seven reactors nationwide would lead to 44% lower energy bills. The claim has not been borne out by the modelling the Coalition has released, and has been dismissed as wrong by energy experts, with some projections it could actually increase bills.
The Australian Energy Regulator, which sets default prices in the non-Victorian states, said both higher wholesale market and network costs were contributing to the rise.
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.
“We’ve seen cost pressures across nearly every component of the default market offer,” the AER chair, Clare Savage, said.
The regulator is expected to finalise the offer in May.
The main factors influencing the proposed price change for residential customers in Victoria were higher electricity network costs, which were partially offset by lower wholesale and environmental costs.
Energy regulators kept default offers fairly stable last financial year, in a reprieve after sharp increases in the years prior as Russia’s invasion of Ukraine pushed up fossil fuel prices.
The Australian Council of Social Services said renters, people on income support or living with a disability or chronic medical condition were finding it particularly difficult to pay their energy bills.
