Electricity Bill Shock
Are you prepared for electricity bill shock when you receive your next power bill? Find out how high your bills may be and how to save on your electricity consumption
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Electricity bill shock can hit households hard, especially in light of the significant electricity price hikes in Australia in 2023. With double-digit increases in some states, many families are bracing themselves for the impact on their monthly expenses. The rising cost of electricity has left many people worried about whether they’ll be able to afford to pay their next energy bill. In this Savvy guide, we will delve into exactly how much your electricity bill may rise and offer energy-saving hints to help you reduce your electricity bill shock.
How much have electricity prices risen in Australia recently?
The most recent increases in electricity prices will affect us all differently, depending on where we live. This is because there are different energy markets and regulatory systems in place in different states. This means there is no average price for electricity in Australia, as there isn’t a single regulated electricity market.Â
However, as of 1 July 2023, electricity prices in NSW, SE QLD and SA will rise between 20.8% and 23.9%, depending on exactly where you live. This applies to standard variable rate electricity plans that fall under the Australian Energy Regulator’s Default Market Offer (DMO). However, if you also have a controlled load tariff for your heating or pool appliances, you can expect price rises of between 19.6% and 24.9%.Â
The Victorian Default Offer, which is the standard price for electricity in VIC, will go up by 25% starting from 1 July 2023. This price was announced by the Essential Services Commission, the energy regulator in Victoria. Â
Households in other areas can expect similar price rises of between 15% to more than 28%. For example, if you live in regional Queensland, and are on Tariff 11 (which is the most common tariff in regional QLD), brace yourselves for price hikes of up to 28.7%. Â
In Tasmania, the state regulates energy prices. Tassie’s Economic Regulator has announced that prices will increase on average by 9.51% per cent as of July 1 2023. In the ACT, the Independent Competition and Regulatory Commission has announced that electricity tariffs will rise by an average of 4.15% for 2023-24.Â
However, those living in the NT and WA can breathe a little easier. Unlike other states, Western Australia and the Northern Territory have regulated energy markets, which means prices are set by the state government. In the 2023-2024 State Budget, a price rise of just 2.5% was announced by the WA Government, and in the NT the energy price rise will be just 2.7%. Â
What is the DMO?Â
NSW, South-East Queensland and South Australia are the three areas of the country that are affected by the Australian Energy Regulator’s DMO decisions. The Default Market Offer (DMO) was created in 2019 to protect customers who don't compare energy plans or switch retailers to get the best deal. It sets a limit on how much energy retailers can charge residential and small business customers who are on default plans. The DMO acts as a price safety net, ensuring these customers are not charged excessively high prices for their electricity.Â
What do these price rises mean for the average electricity bill in Australia?
Naturally everyone’s electricity bill is different, as we are all on separate plans with varying tariffs, and use differing amounts of electricity. Therefore, the average dollar amount increases in electricity bills varies across different states and territories in Australia. Let's explore the approximate average increases:Â
New South Wales: Â
Residential customers can expect yearly increases ranging from around $315 to $594, depending on their distribution zone. For customers with a controlled load, the yearly increase will range from approximately $440 to $594.Â
South-East Queensland: Â
Residential customers without a controlled load will see an increase of around $349 to $402, while those with a controlled load can expect an increase of about $400.Â
Regional Queensland: Â
Tariff 11 customers in regional Queensland may experience a yearly increase of about $429-$450. Â
South Australia: Â
The increase for residential customers without a controlled load will be approximately $439 to $512, and for those with a controlled load, it will range from around $510-$525.Â
Victoria: Â
The average annual bill in Victoria will rise by around $352.Â
Western Australia: Â
The residential electricity tariff in Western Australia will increase by approximately $44 for the average ‘representative’ household.Â
Tasmania: Â
The average electricity bill in Tasmania will go up by about $200.Â
Australian Capital Territory (ACT): Â
The average household in the ACT will face a yearly increase of approximately $75.Â
Note that these figures provide an estimation of the average dollar amount increases in electricity bills across the country. It's important to consider the available energy rebate relief measures provided in the 2023 Federal Budget, and by state and territory governments to help manage the impact of these increases. Â
What can I do if I can’t afford to pay my electricity bill?
If you're struggling to pay your electricity bill, remember that you are not alone. Thousands of Aussies are also experiencing electricity bill shock as a result of soaring energy prices. However, there are steps you can take to help manage the situation and find support. Here's some ideas of what you can do:Â
- Contact your electricity provider: Reach out to your electricity provider and explain your financial difficulties. They may have options available to assist you, such as setting up a payment plan or offering a hardship program.Â
- Check for concessions and rebates: Research and ask about energy concessions and rebates provided by your state or territory government. These programs can provide financial help to those struggling with electricity costs. You might be eligible for discounts, subsidies, or payment assistance.Â
- Seek financial counselling or support services: Get in touch with local financial counselling services or community organisations that offer support. They can provide guidance on managing bills, accessing financial aid programs, and offer advice on budgeting and debt management.Â
- Save energy and lower your bills: Find ways to reduce your energy usage and cut down on costs. Simple steps like turning off lights, unplugging unused appliances and adjusting your thermostat can make a big difference.Â
- Seek assistance from charitable organisations: Some charities provide emergency financial assistance for essential bills, including electricity. Look for local charities or community groups that offer support and inquire about their eligibility requirements and application process.Â
Remember, taking action early and seeking help can help you get through difficult financial times and will make a difference when facing electricity bill shock. Â
How can I reduce the size of my electricity bills?
Here’s some of the many ways you can reduce your electricity bill and save money. Further advice about the running cost of various appliances can be found at Savvy's winter energy guide: Â
Adopt energy-saving habits in your home:
- Turn off lights in unoccupied rooms.
- Unplug electronic devices when not in use.
- Use a power strip to easily turn off multiple devices at once.
- Run your dishwasher and washing machine only when they are full.
- Wash clothes in cold water and air-dry them whenever possible.
- Adjust your thermostat settings to reduce energy usage.
- Close doors and curtains to maintain insulation on hot days.
- Change your ceiling fan settings based on the season.
 Switch to energy-efficient appliances:
- Energy-efficient appliances can save up to 30% in energy consumption.
- Look for appliances with higher Energy Star ratings.
- Choose energy-efficient LED light bulbs for lighting around your home and garden.
- Gradually replace older appliances with more energy-efficient ones.
 Make your home more energy-efficient:
- Block draughts under doors and windows.
- Check and improve roof insulation.
- Replace incandescent bulbs with LED bulbs.
- Consider planting trees for shading options to reduce heat from the sun.
- Use solar power for electricity and hot water heating.
- Consider energy-efficient options like heat pumps for your swimming pool.
Make use of cheaper electricity tariffs:
- Understand time-of-use tariffs, and shift your energy usage to off-peak periods.
- Consider controlled load tariffs for appliances with dedicated circuits.
- Take advantage of lower rates during off-peak hours to charge up your appliances and use energy-intense appliances.
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Disclaimer:
Savvy is partnered with Econnex Comparison (CIMET Sales Pty Ltd, ABN 72 620 395 726) to provide readers with a variety of energy plans to compare. We do not compare all retailers in the market, or all plans offered by all retailers. Savvy earns a commission from Econnex each time a customer buys an energy plan via our website. We don’t arrange for products to be purchased directly, as all purchases are conducted via Econnex.
Any advice presented above is general in nature and doesn’t consider your personal or business objectives, needs or finances. It’s always important to consider whether advice is suitable for you before purchasing an energy plan. For further information on the variety of energy plans compared by Econnex, or how their business works, you can visit their website.