Energy debtors hit 5-year peak as watchdog urges Aussies to switch

Residential electricity prices have skyrocketed by up to 28% in the past 12 months, leaving thousands of households unable to pay their energy bills.

The Australian Energy Regulator’s (AER) 2022-2023 annual retail markets report said electricity  prices surged by between 5% and 28% since June 2022, while gas rocketed by up to 37%, based on the price increase on median market offers in the 12 months to June 2023. 

The electricity and gas price increases experienced in individual states and territories under the AER’s auspices are below:

The AER also found that the proportion of Aussie householders that had been forced onto energy companies’ hardship programs was at a five-year high.

According to the AER’s report, the proportion of residential customers with energy debt increased from 2.5% to 2.9% in the past year. The percentage of customers on financial hardship programs – designed to offer assistance to consumers struggling to pay their energy bills – had increased from 1.1% to 1.4%.

AER Chair Clare Savage stressed the need for customers to keep their eyes on the market for better energy offers and seek help from their energy company on managing bill payment if required.

“We recognise that now is a difficult time as Australians face multiple cost-of-living pressures and that many will need continued support,” she said.

The AER found customers could save up to 11% on annual electricity bills by switching from a default offer to a market contract. Shopping around for a cheaper deal, particularly for customers on a default offer, is a message that the regulator has pushed throughout 2023.

You can find a selection of some of the cheapest market offers in our database for each state in the below tables. For more offers, you can use our free electricity comparison tool to compare prices in your area.

Customers lose confidence as energy debt increases

In a positive sign, however, the proportion of households on market energy offers hit a five-year high of 79% of households. Market offers tend to be much more competitively priced than the government-regulated default offers also available from retailers. 

Another piece of better news was that the average energy debt owed by customers upon entering a hardship program was less than $1,500, a drop of 29% year on year. The AER attributed this decrease to the fact that Australians were receiving assistance from their retailers at an earlier stage than previous. However, the number of customers who were able to clear their debt and exit hardship status had declined since 2021-2022.

Energy Consumers Australia CEO Brendan French said customers were losing faith in the energy market.

“Our latest consumer survey found that 52 per cent of households are more concerned now about being able to afford their electricity bill than they were a year ago,” he said.

“The winter rebates and other supports were a relief for some, but rising energy bills and rising cost of living mean a broader range of people are experiencing financial stress and we need to help them too.”

AER urges customers to use Better Bills

The AER has also reminded customers to take advantage of the new Better Bills Guideline, which came into effect in September in NSW, QLD, SA, ACT and TAS. The guideline simplifies the way energy costs and usage are outlined on power bills, and also notifies customers if they could save by switching to a different plan with their existing retailer.

“As part of the AER’s Better Bills Guideline, consumers should also see a ‘better offer’ message at least once every 100 days on the front page of their energy bill and should consider switching if they can find a better offer for their circumstances with their current or an alternative retailer,” Ms Savage said.

You can find more information in our guide to reading your power bill.