Victorians hit hard by power bill costs
FAMILIES will face hundreds of dollars in extra charges on power bills this year as a 21 per cent increase in electricity usage becomes another cost of living hit in the pandemic.
Household demand spiked as much as 25 per cent between April 1 and May 15, compared with the same time last year, and the trend is set to continue as Victorians are forced to keep working from home.
The Australian Energy Market Commission energy competition review, to be released today, shows the cost hike will come after the average Victorian electricity bill increased slightly last year.
Households in Queensland and NSW reaped annual savings of more than $100 over that time.
The report also reveals: VICTORIANS on the default electricity offer — designed to provide a competitive basic price across retailers — could save between $236 and $330 by switching to the best market offer.
ONLY one in five customers switched retailers last year, a three-year low, sparking concerns households and businesses are stuck on bad deals. VICTORIA had the most customers on hardship plans, with 48,530 people needing payment plans after struggling with debts averaging $1378.
Commission chief executive Benn Barr said while the proportion of hardship customers was small, the industry needed to “keep an eye on any upward trend”.
An increase in customers needing help paying bills has sparked fears of a financial contagion in the electricity system, which would reduce competition and force up power prices.
Retailers have a profit margin of 4 per cent on bills — totalling $66 a year from the average residential customer — and are facing cashflow issues given their need to continue paying electricity network costs, even for customers they cannot disconnect.
The level of debt customers are carrying before going on payment plans has risen 15 per cent since December and some retailers expect bad debts to double.
The commission called on State and Federal energy ministers to look at providing emergency relief to retailers to stabilise the market.