Australian Energy Regulator to pass soaring costs on to customers

Households across the country are set for a power shock after the energy regulator gave providers permission to pass on soaring generation costs.
Those in Queensland, however, have been handed a welcome salve by their state government.
The Australian Energy Regulator on Thursday released its so-called default market offer price, which outlines the maximum that electricity retailers can charge residential customers and small businesses who have not shopped around for a better deal.
A surge in electricity generation costs mean the news was not pleasant reading for those on standing contract offers, which includes 550,00 homes and 93,00 businesses across NSW, South Australia and parts of Queensland.
From July 1, residential customers on standing contract offers in NSW face the prospect of a 12.1 per cent jump above inflation , depending if they have controlled load.
Power bills for South Australians with SAPN will rise by at least 7.2 per cent about inflation and could jump by as much as 9.5 per cent.
South East Queensland – which is serviced by Energex – could cop prices that are as much as 12.6 per cent higher than inflation.
Queenslanders were however given some relief on Thursday as Premier Annastacia Palaszczuk unveiled the state would provide citizens with a $175 cost of living rebate for their next bill.
“With wholesale prices going up due to global instability, we have moved to raise it to $175 because we know the pressure Queenslanders face,” Ms Palaszczuk said.
“Electricity providers will automatically apply the credit, so Queenslanders don’t have to apply.”
Victoria has already released its own price outlook, with costs set to climb by 5 per cent.
Meanwhile, businesses in each of the affected three states are facing a similar shock.
Power prices are set to climb by 6.9 per cent above inflation in South East Queensland, 0.2 per cent above inflation in SA and a whopping 13.5 per cent above inflation in NSW.
The regulator said the higher default market offer followed worldwide disruptions from the war in Ukraine and the associated supply chain disruptions that have sent coal and gas prices surging.

It also said extreme weather in NSW and Queensland had affected coal supplies and electricity demand, while “multiple generators” had been affected by unplanned outages.
The rise comes after new Treasurer Jim Chalmers on Wednesday acknowledged the likelihood of rising power prices despite both major parties campaigning heavily on lowering the cost of living during the federal election campaign.
In South Australia, the retail allowance is set to be higher than the low level of previous years, which the regulator justified because it was concerned it may not allow retailers to ‘achieve a reasonable profit margin’.
The regulator did say that customers who shop around will continue to save on their bills.
Based on offers available this month, residential customers switching from the DMO 4 price to the median market offer could save between $294 and $443 depending on their network region, while small business customers could save between $733 and $1,308.

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