Power bills to surge for thousands under new price cap
Power bills will surge by up to $600 annually for hundreds of thousands of Australian households under a new electricity price ceiling.
The default market offer, determined by the Australian Energy Regulator, fixes the maximum price retailers can charge customers in NSW, South Australia and southeast Queensland.
From July 1, residential customers will see price increases of 19.6 to 24.9 per cent, depending on their region.
NSW customers on the default offer can expect to see prices rise by between $440 and $594 annually, depending on their region, while relevant households in southeast Queensland could pay an extra $402.
In South Australia, residential customers can expect prices to increase by about $512.
Small business customers are facing rises of 14.7 per cent to 28.9 per cent.
About nine per cent of customers are charged the default market rate, which effectively acts as a safety net to ensure domestic users are not charged excessive amounts.
Most customers are on lower, discounted rates, but the default offer also serves as a benchmark for wider prices.
The regulator said high wholesale energy costs continued to drive up retail electricity prices.
Australian Energy Regulator chair Clare Savage said the agency considered the cost-of-living pressures faced by households and businesses, as well as the need for retailers to recover their costs.
"That's why it's important the (default offer) provides a safety net for those who might not have shopped around for a better power deal," she said.
The federal government wasted no time spruiking its interventions in the energy market, including price caps on wholesale coal and gas, saying it had insulated customers from even higher energy bills.
Government modelling suggests the market interventions have shaved $492 off the default offer price for residential customers and up to $1310 for small businesses.
Energy Minister Chris Bowen said customers were facing rises of between 40 and 50 per cent before the government took action.
"These are big increases, but as the regulator made clear, without the intervention of the Albanese government they would have been much bigger," he said.
The head of the energy regulator also confirmed the price caps had kept prices under control.
The federal government committed $3 billion towards direct energy price relief in the May budget.
But social welfare groups want the government to go further.
The head of the Australian Council of Social Service, Cassandra Goldie, said the price cap needed to be extended until 2025 and that the slated increases in income support wouldn't go far enough.
"Governments must step in to do more to provide income and debt relief now," she said.
The opposition has already attacked the government for failing to bring down energy prices.
Energy spokesman Ted O'Brien said the government couldn't claim the lower-than-forecast increase as a win after Labor came to power promising cheaper electricity bills.
"When the government says it could have been worse, it's the government comparing its set of dumb policies now to its really dumb policies only a few months ago," Mr O'Brien said.
Mr Bowen said the government had not given up on its pledge to reduce power bills by $275 by 2025, and would work to hasten to transition to renewable energy to bring prices down.
The Australian Chamber of Commerce and Industry called for the government to expedite investment in clean energy, saying small businesses were struggling to keep up with price hikes.
Greens MP Max Chandler-Mather said gas corporations needed to be slapped with a windfall tax, which could then be used to help struggling Australians.
In a game of winners and losers, the biggest winners were big gas corporations "making billions of dollars in war-time profits and continuing to drive up the price of energy bills for people across this country".
Consumer groups are using Australians to shop around and save ahead of the default market offer price changes coming into effect on July 1.