Electricity bills are set to rise for households and small businesses following a decision by the Australian Energy Regulator in the face of floods, the Ukraine war, and coal plant outages.
The watchdog released its final determination for the 2022/23 default market offer (DMO) on Thursday, which sets a safety net price and the reference point for customers to shop around.
The proposed default market offers for residential customers will go from $1,512 to $2,092 (up 8.5 to 14.1 per cent) in NSW; $1,620 (up 11.3 per cent) in southeast Queensland; and $,1840 (up 7.2 per cent) in South Australia.
For business customers, the DMO will go from $3,782 to $4,901 in NSW (up between 10.0 and 19.7 per cent); $3,446 in southeast Queensland (up 12.8 per cent); and $4,539 in South Australia (up 5.7 per cent).
The AER said wholesale costs for retailers had risen by 41.4 per cent in NSW, 49.5 per cent in Queensland, and 11.8 per cent in South Australia.
This was driven by reductions in power generation resulting from unplanned outages and higher coal and gas prices, the slowing of investment in new plants, and increasingly sharp highs and lows in demand.
The regulator said pressures had been compounded by the war in Ukraine, extreme weather in NSW and Queensland affecting coal supplies and electricity demand, and further unplanned outages at generators.
AER chair Clare Savage said it was a difficult decision because the regulator sought to balance extra cost pressures on consumers with ensuring retailers could recover their rising wholesale and network costs.
"In setting these new DMO prices, we understand the significant impact they will have on some consumers who may already be struggling with cost-of-living pressures," Ms Savage said.
"We have given scrutiny to all factors affecting the DMO calculation and have set safety-net prices that reflect the current conditions and underlying costs to retailers."
She said it made it all the more important for customers to shop around for the best energy plan for their circumstances.
The AER has a dedicated price comparison website, Energy Made Easy, which Ms Savage said currently showed offers allowing residential customers to save about $443 or 24 per cent off their bills.
Small businesses can save about $1,308 or 29 per cent by switching.
Incoming Energy Minister Chris Bowen blamed "nine years of Liberal denial and cost" for rising costs.
"There are international factors at play here ... but the lack of energy policy, the lack of investment in new energy, the lack of investment in renewable energy, and the lack of transmission over the last nine years means that Australians are paying more for electricity than they should be," he said.
Mr Bowen said the introduction of more renewable energy under the Albanese government would put downward pressure on prices.
Greens leader Adam Bandt said Labor needed to rethink its pledge not to fast-track the closure of coal-fired power.
"That's a problem because it's pushing up power prices," he said.
Australian Council of Social Service energy director Kellie Caught said the new government should immediately act by updating its guidelines to the AER to set the direct market offer at an "efficient price" by lowering retail margins, as has been done in Victoria.
Other priorities include improvements to energy concessions and expanding access to energy efficiency measures and rooftop solar for low-income homeowners.
