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Electricity prices to skyrocket 30 per cent

Thousands of Aussies will see their energy bills increase in the coming months.

Electricity prices
Electricity prices are set to soar by up to 30 per cent on July 1. Here’s how to save on bills. (Source: Getty)

Thousands of Aussie households will be slugged with higher electricity bills, with prices set to soar by up to 30 per cent from July 1.

The Australian Energy Regulator (AER) released its draft determination on electricity prices today, which acts as a price cap and will impact Aussies on default contracts in New South Wales, South-East Queensland and South Australia.

NSW households will face increases of between 20.9 and 23.7 per cent, Queensland residents will see increases of 19.5-19.8 per cent, while those in South Australia will see increases of 21.3-21.8 per cent.

Victoria’s Essential Services Commission (ESC) also released its draft decision today and proposed a 30 per cent increase for households. The ESC said a typical household would see their bills increase from $1,403 to around $1,829 per year - a jump of roughly $426.

These changes only directly apply to Aussies on the default offer, however the determination acts as a benchmark for other retailers. There are around 600,000 people on the default offer in NSW, South-East Queensland and South Australia, and around 400,000 Victorian households are on the default offer.

AER chair Clare Savage told ABC’s Radio National the price hikes could have been even worse - 40-50 per cent - had the government not intervened with gas and coal price caps.

The energy regulator’s final decision will be announced in May, and change will come into effect on July 1.

3 ways to save

Joel Gibson, author of Kill Bills and Easy Money, said it was a double blow for Aussies who had already copped price hikes this year.

“Millions of Australians already had a rate hike in February and March, now we are being told rates are going up by 20 to 30 per cent, on average, in July,” Gibson told Yahoo Finance.

“This year, prices are going to go up more than once, so we need to be prepared to switch more than once.”

1. Shop around

Aussies could save up to 17 per cent by shopping around and switching from a standing offer to the lowest market offer, according to the AER.

“That’s pretty substantial and you could almost wipe out the price hikes coming in July by switching,” Gibson said.

Aussies can compare offers through government energy sites Energy Made Easy and Victorian Energy Compare, Gibson said.

2. Check for government rebates and concessions

“In some states, there is over $1,000 in rebates potentially available already. There are also promises - for example in the NSW state election - of more to come,” Gibson said.

For instance, Victorian households can get a $250 Power Saving Bonus. The first round of the scheme closes on March 23 and then there will be a second round, meaning households can potentially get $500.

You can see what rebates and concessions you are eligible for by visiting Energy.gov.au.

3. Cut down on big energy costs

It’s also worth seeing where you can cut down on your energy costs at home.

“Focus on the big energy guzzlers, which are heating and cooling, swimming pools and hot water. Heating and cooling can be 30 per cent of your bill in summer and winter, for example.” Gibson said.

You can do things like not turning your air conditioner all the way down during summer, Gibson said. As a rule of thumb, every degree on the thermostat can cost you an extra 10 per cent over the season.

If you are struggling to pay your bills, contact your provider’s hardship department and check what help is available for the government or not-for-profit schemes like the No Interest Loans Scheme.

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