Electricity Prices Are Set To Jump By Up To 18 Percent In July
The Australian Energy Regulator was forced to hold off announcing the increase until after the election.
In yet another blow to the millions of Australians struggling with the rising cost of living, power bills are expected to soar up to 18 percent from July.
The Morrison Government initially delayed the Australian Energy Regulator’s release of its default market offer (DMO) until after the election, which not only left voters unaware of the massive changes when they headed to the polls, but also means the incoming Albanese Government is now set to cop the heat for huge increases that will be passed on to customers.
But how much is your electricity actually expected to increase by, and what can you do to avoid paying out the wazoo for power — especially in the middle of winter?
What Is The Default Market Offer (DMO)?
Basically, the DMO was introduced in 2019 as a way for residential and small business energy customers in South Australia, New South Wales and south east Queensland to compare prices simply. It is the annual maximum total bill amount that energy providers can charge eligible customers for a set average usage amount.
The DMO sets a cap for default plans for the average usage amount, and energy providers can price their supply and usage charges accordingly — provided the total bill doesn’t exceed the DMO price.
According to the Australian Energy Regulator, the price is determined based on “the efficient cost of operating in the region, including a reasonable margin, as well as customer acquisition and retention costs.”
While only about 10 percent of Australians are actually eligible for the DMO price, this generally serves as a reference point for retail prices across the board.
It’s worth noting that the DMO is not designed for competitive pricing, so you’re still likely going to be better off if you shop around for the cheapest deal.
How Much More Will I Be Paying For Power?
The DMOs will increase between 8.5 percent and 18.3 percent, depending on where you live.
In NSW, the increase will be between 8.5 and 18.3 percent, south-eastern Queensland will see an increase of up to 12.6 percent, and South Australians will cop 9.5 percent. Meanwhile, the Victorian Default Offer (which is different to the DMO and is designed to be competitive) increased by 5 percent.
According to the Australian Competition and Consumer Commission’s analysis, this will increase power bills by up to $250 per year — bringing the average annual electricity bill to a whopping $1434 per year.
How Can I Save On Power?
There’s nothing we can do to stop the increasing power costs, but thankfully, there’s actually a lot you can do to personally minimise your spending.
For starters, it’s worth comparing all of your options and seeking out the best deal in your area. If you live in Victoria, the government will actually give you a $250 bonus if you compare your energy on the Energy Compare website. The programme is only open for concession recipients until June 30, but any Victorian household will be eligible for the bonus from July 1, so mark your calendars.
Similarly, West Australians may be eligible for a $400 credit towards their electricity bill, if they meet the criteria.
If you’re not in Victoria or WA, you can use the Federal Government’s energy comparison website to get the same information, sadly, without the $250 little treat.
It’s also worth checking if you’re eligible for any energy rebates, which are often exclusive to those receiving some sort of government assistance. New South Wales, South Australia, Queensland, Northern Territory, ACT and Tasmania all offer rebates and concessions in certain circumstances.
Investing in appliances with a higher energy rating will also save you money in the long run, but let’s not kid ourselves here, with the cost of living increasing exponentially, few of us are in a position to splash out on an expensive new fridge.
Alternatively, being more mindful with the appliances you already own could save you a quick buck. For example, using an air fryer could be between 35 and 50 percent more energy efficient than your oven, not to mention, it’ll cook faster.
Call Your Provider
On account of the fact that energy is an essential service, your provider is legally required to help you if you’re in financial hardship, so it’s worth giving them a call if you’re struggling — or think you will struggle with a price hike.
This likely won’t result in a discount but it can result in averaged payments or payment plans to make it more manageable.
Get Your Landlord To Fix Things
We’ve all experienced, or at least heard about rental horror stories and landlords not fixing things in a timely manner, but with costs of electricity going through the roof, it’s even more important to hassle your landlord to fix that crack in the wall.
Whether it’s a leaky tap, a lack of insulation or a giant hole in the wall that means you’ve gotta run the heater 24/7, make sure you put pressure on your landlord to fix things in a timely manner to avoid copping the costs on your next power bill.
Avoid Unnecessary Power
This one probably goes without saying, but avoiding unnecessary power is the best way to save a buck or two every day. Opening curtains instead of turning on lights and investing in a good old fashioned hot water bottle instead of cranking the heater will undoubtedly make a difference.
Sure, it’s not as glamorous as coming home to a toasty, warm house and pretending it’s not four degrees outside, but it will save you a pretty penny.