Electricity Bill Increases Forecasted for Millions of Everyday Australians

 Amid a cost-of-living crisis affecting the majority of Australian households, there’s been an unfortunate development regarding utility costs.  

The price of electricity could increase for a swathe of consumers from July 1, 2024, as the Australian Energy Regulator (AER) has confirmed the new prices for energy transmission from six key distributors over the next six years.  

The distributor in your area manages the poles and wires - the infrastructure that feeds electricity to your home.  

As a result of their decision, several residents in New South Wales, Tasmania and the Northern Territory may experience price hikes of up to 4.1% per year, on average, until 2029, commencing in just under two months.  

With cost pressures already high and margins slimming for many Aussies, this news reinforces the importance of seeking out the most affordable electricity options from the available retailers to try and offset these increases. 

“The next twelve months may prove a challenge for many households as the consequences of historically high prices continue to apply pressure, especially within the major urban centres,” CIMET CEO Ankit Jain said in response to the news. 

“Everyday Aussies should consider prioritising agility and flexibility over brand loyalty within this cost environment, as any potential saving will make a difference.”  

It’s A Mixed Bag, Depending on Location 

The AER announcement affects NSW customers supplied by Ausgrid, Endeavour Energy and Essential Energy, Tasmanians supplied by TasNetworks, NT residents supplied by the Power and Water Corporation, and ACT consumers supplied by Evoenergy.  

The highest hike will reportedly hit those in the north, with NT households being told to brace for an average increase of approximately $116 per year.  

The forecasted impact on utility bills is less severe for other regions. Tasmanian households are next, witnessing an average increase of $56/year, followed by those in the ACT ($18/year). For residents in NSW, the price will increase by an average of between $14 and $39, depending on the distributor. 

Mr Jain said that while these numbers were accurate as a general guide, consumers should remember that utility costs will still vary significantly from one house to the next.  

“There could be a considerable difference in the increase in net cost for a family with a pool or in-built air conditioning versus one with fewer of these energy-intensive appliances, especially if they have rooftop solar,” he said.   

“The devil is in the detail, although there’s no doubt that we're seeing an upward trend predicted in utility costs across large sections of the country.” 

Check Average Electricity Bill in Australia

A Regulatory Response to a High-Cost Environment 

The AER has identified rising interest rates and inflation as the primary causes for their revenue decisions for 2024-29.  

While this may come as cold comfort for affected residents, it is worth mentioning that these network cost increases are less severe than seen in previous years, which resulted from the increased cost of wholesale electricity.  

The increases in network transmission costs over the next six years can also be attributed to the development of large energy infrastructure projects, such as the Marinus Link undersea cable that will connect Tasmania and Victoria. While the costs can be significant, these projects help ensure that Australians retain access to enough energy to cover their usage needs.  

The AER has committed to transparently tracking the performance and cost-effectiveness of these projects over their implementation phases. This accountability is part of a broader regulatory effort to ensure that tangible improvements in service quality and energy security justify the extra financial burden on consumers. 

Making the Best of a Bad Situation 

With these price hikes on the horizon, Mr Jain stresses that millions of Australian households still retain the power of consumer choice regarding what they eventually pay, with their selection of retailer playing a critical role in overall cost.  

“There are so many households choosing to set and forget their energy plan; that mentality could quickly lead to set and regret, especially if they’ve been moved to the Default Market Offer plan from their retailer – they’re basically leaving money on the table,” he said.  

“These families need to take control of their energy expenditure in 2024, and leveraging the power of a comparison platform such as Econnex to find a potentially cheaper option can help lighten the load.” 

With a focus on taking stock of their options and staying aware of price movements in the market from retailers, Mr Jain feels that consumers can still keep their heads above water.  

“With a little time and the right tools at their disposal, many everyday Aussies have the ability to significantly reduce their energy spending over the next few years – they just need to stay aware of their options.”