Power bills to surge despite budget tipping modest rise

Power bills in at least three states will rise by more than double the amount estimated in the federal budget.

In a stoush with Liberal Senator Hollie Hughes over the impending price hikes, Assistant Minister for Energy Jenny McAllister denied the timing was planned to avoid scrutiny of the federal budget by parliament.

There was “no basis, no grounds” for such a claim, Senator McAllister told a Senate estimates hearing on Monday.

Australian Energy Regulator chair Clare Savage confirmed the default market offer (DMO), which sets maximum electricity price increases for households and small businesses in NSW, southeast Queensland and South Australia from July 1, will be released on Thursday.

Under the regulator’s draft offer released in March, it was estimated residential customers on standard retail plans could face price increases of up to 23.7 per cent and small business customers up to 25.4 per cent.

The figure would be “in the ballpark” of an earlier draft version released in March for consultation, Ms Savage told the parliamentary hearing.

Under a separate decision, Victoria’s power bills are expected to rise by about a third for the coming financial year.

The May budget estimated retail electricity prices would increase by 10 per cent in 2023/24.

But Ms Savage said the federal budget numbers were a national average, whereas the DMO covered 630,000 customers.

Eligible customers would receive a rebate “around about or more than offsetting” the impact of the July 1 price rise, she said.

Up to $500 in electricity bill relief for households and up to $650 for small businesses will land in eligible utility accounts as a credit.

A temporary price cap on wholesale gas and state-imposed caps on the price of coal used for electricity generation, along with a mandatory code of conduct for domestic gas sales expected to be finalised in June, are also intended to deliver bill relief.

Some $1 billion in new funding allocated to the Clean Energy Finance Corporation will cover energy upgrades for more than 110,000 households, the green bank’s boss Ian Learmonth said.

Households are expected to use the cheap loans to install solar panels, double glazing and energy-efficient appliances to permanently reduce power bills.

Marion Rae
(Australian Associated Press)