The Australian Energy Regulator (AER) has unveiled a draft decision regarding the default market offer (DMO), indicating that price caps for standing retail plans will rise starting July 1. This change is expected to result in annual bill increases for households in New South Wales, south-east Queensland, and South Australia, with hikes ranging from $114 to $200.
In contrast, residents in Victoria may experience less financial impact, with the Essential Services Commission (ESC) suggesting that the Victorian default offer (VDO) could lead to either a minor drop of $19 or a modest increase of $68 annually. According to Canstar research, the financial strain will vary significantly across different states. NSW residents on standard plans are set to face the steepest increases in their electricity bills for the 2025/2026 financial year, specifically Ausgrid customers who may see bills soar to $1,989, reflecting an increase of $159. Other utilities, such as Endeavour Energy and Essential Energy, may see similar hikes, with bills rising to $2,357 and $2,713, respectively.
In South-east Queensland, Energex customers could face a jump of $119, raising their annual bills from $2,066 to $2,185. Meanwhile, households in South Australia will endure the smallest increase, although their bills are still projected to rise by $114, bringing the total to $2,344.
Victoria stands out with some customers potentially benefiting from reduced bills under the new draft pricing. The largest increase in the state would affect CitiPower clients, who may see an additional $68, raising their bills to $1,456. Powercor customers could experience only a $19 rise, while United Energy and Jemena will implement similar minimal hikes. Conversely, AusNet Services customers might see a slight decrease in their annual bills by approximately 1 per cent, lowering costs by $19 to $1,883.
Canstar’s insights director, Sally Tindall, expressed concern about the implications of these price hikes, especially in light of the ongoing cost-of-living crisis. She highlighted that the draft figures could see further increases post-consultation, noting historical trends where 67 per cent of final prices have exceeded initial draft proposals over the past six years.
The AER will engage in consultations before finalising the prices, scheduled for May 24 in Victoria and May 26 for NSW, south-east Queensland, and South Australia. The revised benchmark prices are set to take effect from 1 July 2025, marking a significant shift in electricity costs for many Australians.