Fresh blow for Aussies as power bill surge on the horizon
More than half a million Aussie households will see their power bills surge by at least 20 per cent in the middle of winter.
Origin Energy chief executive Frank Calabria told the Australian Financial Review's Business Summit that electricity prices are set to jump by more than 20 per cent from July 1.
It comes as Aussie households are already battling sky-high cost of living pressures as inflation and interest rate rises bite the budget.
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Calabria said the Australian Energy Regulator has made comments recently to suggest prices would increase on top of the 18 per cent price rise on the default market offer last year.
The default market offer is the maximum price providers give to consumers on standing deals who haven't searched for a more competitive deal.
"I would just reiterate that [the price increase] is in fact recovering costs that were incurred by the industry, which if we cast our mind back to May and June, certainly put the energy system under pressure," Calabria said.
"Nevertheless, it's going to be a contributor to cost of living, which we're acutely aware of in terms of our customer base and supporting those that are less able to pay."
The price rise will impact customers in Queensland, NSW and South Australia while those in Victoria and Tasmania are part of a different process and Western Australia and the Top End are on a different market.
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The increase comes after last year's market turmoil which included coal plant outages.
Australians on the east coast were hit by power shortages, and the widespread blackouts residents were warned of were only averted when the energy regulator (the Australian Energy Market Operator, or AEMO) intervened.
This crisis was followed by budget forecasts energy bills would increase by 30 per cent this year sparking government intervention.
So the Albanese government introduced gas price caps at $12 a gigajoule for a year.
The NSW and Queensland government also introduced a temporary coal price cap of $125 per tonne.
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These interventions put a stronghold on the energy market and managed to clamp down on the sky-high price rise predictions.
Treasury analysis of ASX data showed prices in NSW dropped by 41 per cent and by 46 per cent in Queensland.
But now the welcome reprieve is over for Australians who are preparing for the possible July price rise as energy providers recoup their losses.
"So it's capturing the costs that were incurred through the winter we've just been through," Calabria said.
"But that forward price, if it stayed lower, would actually then flow through to consumer prices after that."
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