Yahoo Finance Stern energy bill warning as fine print exposes $1,000 hikes: 'Up 103 per cent'
Australians are being urged to check the fine print on their energy bills after customers expose huge cost increases.
Despite what the pollies say about power prices dropping this winter, some households are copping price hikes over $1000. Others are being moved to plans that are more than double the government reference price.
I know this because Australian consumers have shared a range of letters from their energy retailers with us at consumer network One Big Switch. For example, we’ve seen:
One plan that is rising to 103 per cent above the government reference price,
Another plan rising to 80 per cent above the government reference price,
A $700+ annual increase in one electricity bill, and
A $1000+ increase on another electricity bill.
The letters mentioned above are from retailers including Tango, Globird and Engie, who have defended their plans by saying they operate on very thin margins and only raise rates when “absolutely necessary”.
These big price increases are surprising after headlines in recent months about government reference prices dropping in most states by up to 6 per cent this year.
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But what many don’t realise is that only around 10 per cent of homes pay the government reference price because they’re on ‘standing offers’ - and that percentage gets smaller each year.
Instead, most households are on ‘market offers’, which retailers can increase without any apparent limits as long as they provide written notification.
As anyone who has seen a bill or a letter from their energy retailer knows, they can contain all manner of confusing jargon and fine print and it’s easy to miss important information.
It's still possible that most households are getting a price cut this winter but we just don’t know because information about market offers is not public.
The examples of price increases from One Big Switch members show that there’s a broad range of price changes out there.
'Not a real price cap: Protections fail vulnerable Aussies
These shocking price hikes raise the question: what exactly has the five-year-old “reference price” achieved to protect the most vulnerable consumers from over-paying for power?
The government reference price was introduced by the Morrison government in 2019 as a way of protecting consumers from bill shock and making plan comparisons easier.
It’s often called a “price cap” but it’s full of holes.
Evidence is mounting that the concept has failed to protect vulnerable consumers and needs an urgent review.
In Dec 2023 the ACCC warned “47 per cent of residential customers [were paying an] estimated annual cost equal to or higher than the default offer [reference price] in August 2023.”
No one should be paying power prices above the government reference price - let alone double the price!
There are plans available in most states right now that cost 15 per cent or even 20 per cent less than the government reference price.
This shows how badly the so-called price cap has failed to protect consumers because it’s not a real price cap at all - it’s just window dressing.
Australian governments need to review the reference price model urgently and fix it so that it provides more effective protection for Australian consumers.
Joel Gibson is the campaign director at OneBigSwitch.com.au - a consumer network with more than 1.3 million Australians joined since 2011. Joel is on TikTok & Instagram @joelkillsbills
