Late last month, a major energy regulator signalled Australians would be seeing significant hikes in their power bills from July 1.
The regulator updated something called its default market offer, which is essentially a cap on how much electricity retailers can charge customers.
It takes into account the steep rise in wholesale power prices, limiting how much customers will pay while still allowing for retailers to make a profit.
How much are prices going up by nationally?
That's a tricky question to answer, because it changes from state to state and, if you're in Queensland, there's two zones.
Even though it sounds like it should be, the Australian Energy Regulator (AER) isn't exactly a national body — it really only covers NSW, South Australia and south-east Queensland.
From there, it breaks down into states and territories doing their own thing.
So there's no blanket answer for all of Australia.
How much are power bills going up by in my state?
Again, this is an inexact answer because these are just the caps state and territory regulators had set out. It could differ between individual energy suppliers.
But here's what the regulators are saying:
ACT: From July 1, tariffs will actually decrease by an average of 1.25 per cent, according to Independent Competition and Regulatory Commission. The commission estimates this equates to an annual decrease of $23 for the average household.
NSW: In New South Wales, the default market offer will increase by a maximum of 9.6 per cent, 11 per cent or 18.3 per cent, depending on distribution zones. That works out to be a maximum increase of between $210 and $369 annually.
Northern Territory: The Northern Territory's prices are set out by the Electricity Pricing Order, which set by the territory's treasurer. Last year, that document was signed on June 9, but the order that will come into effect on July 1 hasn't been made publicly available yet. It's expected to come out in the near future.
Queensland: Power bills are expected to rise by up to $220 a year, or 12.6 per cent, in south-east Queensland, according to the AER. In regional Queensland — or the rest of the state, apart from the south-east corner — power bills will increase by 9.2 per cent, or around $119 each year, according a report by the Queensland Competition Authority.
South Australia: The South Australian default market offer is expected to increase by up to 9.5 per cent, or an increase of $198 per year.
Tasmania: The Tasmanian Economic Regulator's determination for the 2022-23 financial year isn't out yet. It's set to be made later this month.
Victoria: On average, the annual bill for typical residential customers on the Victorian Default Offer will be 5 per cent higher, starting from July, according to the Essential Services Commission. This means an increase of $61 annually.
Western Australia: The West Australian government determines household prices each year when handing down the state budget. Back in May, the state government announced prices would increase by 2.5 per cent.
What's driving the price hikes?
The AER called out a few major factors at play here:
- The war in Ukraine: Russia a major player in the world's energy supply, but sanctions limiting the import of Russian oil and gas in places such as the US, the EU and here in Australia have effectively turned off that tap. This means that, globally, there's a much higher demand for gas, coal and oil from other nations and, thanks to a smaller supply pool, the prices for those commodities are going up. Roughly two-thirds of Australia's electricity supply is reliant on coal, so price hikes have a big impact on us.
- Unplanned outages at coal-fired and gas plants: There's a few reasons these plants aren't running at full capacity, but Resources Minister Madeleine King said some can be put down to shutdowns for maintenance on ageing stations.
- Extreme weather conditions: The flooding events in New South Wales and Queensland have affected the supply of coal and the interruptions are having flow-on effects
- Increase in network costs in New South Wales: the extra costs for Essential Energy and Endeavour Energy have pushed up retail prices, but only in certain distribution areas in the state.
What's the government doing about it?
On Wednesday, Australia's energy ministers got together and came up with an 11-point plan.
A major point was fast-tracking what's called a capacity mechanism — that will see energy consumers pay power providers to keep spare energy capacity in case it is needed.
It will be brought forward after it was originally slated for 2025, but there could be hurdles to overcome.
Federal Energy Minister Chris Bowen said another idea was to allow the AER to buy gas and keep it in storage for a "crisis situation" such as this.
However, Mr Bowen says, there's no "silver bullet" for the current situation.
The federal government is also considering pulling the so-called "gas trigger", which would force gas exporters to reserve some supply for use in the Australian market.
But, even if that trigger was pulled today, it wouldn't come into force until January.
What can I do about rising power bills?
AER chair Clare Savage says now's the time to shop around.
"Residential customers can currently save around $443, or 24 per cent, off their bill, and small businesses can save around $1,308 or 29 per cent by switching," she said.
AER has a tool for customers to compare prices in ACT, NSW, Queensland, SA and Tasmania.
There's a separate site to compare prices in Victoria.
Mariam Gabaji, an energy expert at Finder, recommends picking up the phone.
"The first step is to call your provider and find out if you can get a cheaper plan and, if so, find out if they will end up increasing prices before the first of July reset," she said.
"[Another] step is to shop around for other energy plans because you can lock in a fix-rate plan, [which] means that your user cost won't go up for 12 months, so you'll be safe from any price hikes that might be coming up over the next couple of months."
Most customers in Western Australia and parts of the Northern Territory have more limited options.
Western Australia's energy laws mean only "contestable customers" — which are, typically, businesses that use more than 50MWh of electricity per year — can choose their energy provider.
Residential customers in Western Australia are either supplied by Synergy or Horizon Power, depending on where they live.
However, they can choose between plans: Check out the Synergy options or compare the Horizon options.
And only people in the Northern Territory's major centres — Darwin, Katherine, Tennant Creek or Alice Springs — are able to choose their providers, while Power and Water is the supplier for all parts of the territory.
Check out the five providers at the Power and Water website.
What can I do to save power?
Check your temperature settings
- Hot water systems: The federal government's recommended setting for thermostats is 60 degrees Celsius for storage hot water systems and no more than 50 degrees on instantaneous systems
- Air conditioners: Keep the temperature between 18 and 20 degrees for heating and between 25 and 27 for cooling
- Washing machines: Use a cold water cycle or, if you must use hot water, keep it below 60 degrees. A hot cycle can use up to 10 times more energy than a cold wash.
Keep draughts out
Filling gaps to stop your warm or cool air from escaping can cut the average energy bill by up to 25 per cent according to the federal government.
Use door snakes to block gaps in entry ways and apply weather seals to doors, windows, skirting boards, skylights and cornices.
And close the doors to rooms you're not trying to heat.
Use the sun to your advantage
Open curtains and blinds to warm a room in winter — but only while the sun is shining into it.
Close the curtains or blinds before it gets dark to trap the warmth in the room and block out the cool air coming off the glass.
Switch it up — or off
Replace your showerhead with a four-star-rated, water-efficient option.
That'll cut down on water heating costs because you're using less water and, as a bonus, it will cut down on your water bills. The federal government estimates a saving of around $315 a year for a family of four.
Go with energy-efficient LED light bulbs, which use around 80 per cent less energy than older-style ones.
Make sure you're turning off lights when you're not in the room.
And, when you're not using appliances such as washing machines, dishwashers, microwaves and even your TV, switch them off at the wall.
Editor's note: This story was originally published with figures for the ACT from the previous financial year, which warned customers about an increase in prices. It has been corrected to include the 2022-2023 figures, resulting in a decrease in prices.
