From today, more than half a million Australian households will start paying more for energy.
That’s because the new default market offers (DMO) set by energy regulators came into force from today, which means the maximum amount retailers can now charge has been upped by more than $200 a year in some areas.
DMO prices were introduced a few years ago to stop retailers from overcharging customers, and effectively act as a safety net for energy users.
This year, the energy regulator faced the “difficult” reality of lifting the price caps amid soaring wholesale energy prices, unexpected coal plant outages and not enough investment in new generation capacity.
While these hikes only apply to households on the default offer, Compare the Market spokesperson Chris Ford said retailers would start lifting their prices now that the new DMO had taken effect.
He also said it was easy to end up on the DMO unknowingly because households fell onto the DMO rate when their existing deal lapsed.
How much prices are going up in each state
Under the revised settings, NSW customers on the default offer can expect to see prices lift by $119-$227 annually, depending on the region, and in South-East Queensland, customers will see around a $165 lift.
South Australian customers will see the smallest average increase of $124 more than last year, while Victoria - which sets its default market offers separately - also upped its safety net price by 5 per cent this week, which will see bills for the average Victorian household on the default electricity offer increase by $61.
In the Australian Capital Territory, prices are actually expected to drop by around 1.25 per cent, on average, according to the Independent Competition and Regulatory Commission.
An update on the Northern Territory's power prices has yet to be announced.
Tips to save on energy
Shopping around for a better deal is the best way to save on energy.
Just by shopping around for a better deal, households could be saving around $443 a year, or 24 per cent, according to the Australian Energy Regulator (AER).
Mariam Gabaji, energy expert at Finder, offered a couple of other tips to save energy:
Insulate heated rooms as best you can. When your heater is on, keep all doors and windows closed to trap in the warm air.
Consider having your air conditioner/heating unit checked. Older models are less efficient and more costly to run than newer ones. Also, make sure it’s cleaned to keep it clear of dirt and bacteria that clogs the system.
Switch devices off at the wall. Standby power can cost the average household around $100 a year. Be sure to switch off devices like air conditioners, game consoles and printers off at the wall instead of leaving them on in the background.
Opt for energy efficiency where possible. Using energy-efficient appliances in the kitchen and laundry room can also help to keep your overall energy costs down – leaving more room for you to use the heater when you need it.