Power bill shock to hit Aussies this month: What can you do to prepare?

Two in three Australian households have been warned by the energy regulator to brace for a bill shock with the price impact of 2022’s energy market mayhem set to hit households from this month.

Customers on a quarterly billing cycle – at least 68 per cent of consumers, according to Canstar Blue data – are likely to see the full impact of recent wholesale electricity price rises on their October bills, the Australian Energy Regulator (AER) said in its latest report.

Monthly billing customers have likely experienced smaller increases to their bills since August the AER said in the same report.

The warning follows a tumultuous period during which a series of dramatic and unprecedented wholesale electricity price rises were recorded, first in the January quarter 2022 with a whopping 141 per cent increase over 12 months, and then in the June 2022 quarter where prices effectively doubled again.

In an attempt to absorb these costs, higher default market offer prices – essentially the capped price a retailer can charge customers for power usage – were implemented in New South Wales, south-east Queensland, South Australia and Victoria on July 1, 2022.

Higher wholesale costs and default prices have left almost all retailers with no choice but to increase prices for customers, both on standing or ‘capped’ offers and ‘cheaper’ market offers. These moves in turn sparked fears about energy affordability and debt escalation for Aussie households, particularly as living costs continued to rise and wage growth plateaued.

Canstar Blue found that in the second quarter of 2022 alone electricity prices increased by as much as $502 annually on average in some states.

AER Chair Clare Savage said some consumers would struggle to cover these higher energy prices.

“Energy prices are pushing up in an environment where consumers already face higher costs of living,” Ms Savage said. “We’ve seen record wholesale energy prices in July, but network costs are also likely to increase as inflation and rising cost of capital impact the cost of network investments that will be needed to support an orderly decarbonisation of the energy system.”

Nearly 70 per cent of Australians believe that electricity and natural gas will become unaffordable for consumers within the next three years, an August survey from Energy Consumers Australia found.

The independent group, which represents energy consumers, also found a significant decrease in the level of confidence Australians have in the energy market (just 37% reporting positive responses) and in the value for money for electricity prices provided (53% with a positive response).

Retailers have been warning consumers of significant price increases since May, with a handful even going as far as telling customers to find a better price with a different provider to avoid seeing their bills double.

I’ve had a nasty bill shock! What can I do about it?

If you’ve recently received a shock energy bill, don’t panic! There are a few different things you can do to lower the risk of your costs rising further.

1. Compare the usage amounts on your most recent bill to your previous one

The first thing to do is establish whether or not the higher costs can be attributed to a change in prices or additional usage in the home. Grab a copy of your most recent bill and the one prior to that and compare the usage amounts on each. If they are similar it’s likely your bigger bill is a result of higher energy prices (which you can also check whilst looking at your bill). If your usage amount is significantly greater however, then it might be time to look at what could be driving your usage up.

If there’s been a seasonal change, additional heating or cooling may have contributed to this. There are also a number of appliances, though, that could be adding to your power usage so it doesn’t hurt to check those too. It might help to install an energy usage monitor or mobile app to track just how much juice each of your appliances is using.

As for prices, if these have jumped up on you unknowingly, it might be worth going back through your emails or communications with your provider to check that you haven’t missed any price increase announcements. These may be listed as a notice on older bills. If you can’t find one, give your retailer a quick call to ask if the rate you pay for power has increased.

A final cautionary note for energy usage; check that your bill was based on a meter reading and not an estimated reading. While a meter read will track your exact usage for the month or quarter, estimated reads will use historical data and average usage amounts in your area to give a general figure – which means it could be significantly over or under your actual usage. You can check this by seeing if there is a little ‘E’ on your bill. Generally estimated readings are used when access to a meter has been blocked at the property, however you may also receive one if you are on monthly billing but don’t have a smart meter or switching energy providers. If you’re concerned about an estimated bill, it is best to contact your energy provider.

2. Check you’re on the cheapest possible price

If you can’t remember the last time you compared electricity prices in your area or even just with your current retailer, there’s a good chance you could be paying more than you need to for power.

To check if you could be getting a sweeter deal for power, you can ask your existing provider if you are on its ‘best price’ in your area. If you aren’t, ask if you can be switched to that deal as soon as possible.

If you are on your provider’s best available price, or you simply want to check whether you can get a cheaper deal elsewhere, it might be time to widen your comparison scope. With Canstar Blue’s free comparison tool, you can do just that! We compare deals from more than 25 providers across Australia and all you need is your postcode.

For those looking for a more personalised approach, we also offer price comparisons based on your actual usage data. With our Bill Drop tool, you can upload your most recent bill and we’ll check to see whether you could be getting a cheaper price, based on an analysis of your unique energy usage data.

Cheapest Electricity Deals Across Australia

For a taster of what you could be saving on your energy bill, we’ve listed some of the cheapest electricity plans currently available in NSW, Victoria, SEQ and SA below. For a full range of pricing and products, it is best to head to our comparison tool.

3. Check if you’re eligible for concessions or discounts

If there’s nothing you can do about your usage levels, and you’ve reached a stalemate when it comes to prices, it might be time to take a look at the different concessions or bill discounts that may be available in your state or territory too.

Most state and territory governments offer concessions for a range of customers, including seniors, the immunocompromised and single parents. Some retailers also provide discounts or specialist plans to customers in these positions too.

Other ways to find greater value and potential discounts from your electricity plan is by looking at plans that have access to a rewards program or allow you to piggyback on an existing membership you hold, such as Qantas Frequent Flyer or your motoring club.

4. Ask you retailer about financial hardship or payment plans

If a bill shock has left you seriously concerned about your ability to pay your power bill, don’t be afraid to reach out to your provider for assistance. Providers are required by law to have systems in place to help customers manage their energy costs and ensure they continue to receive access to electricity. This could be in the form of an extended payment plan or by placing you in a financial hardship program to help navigate your costs in a time of financial crisis.

Alerting your provider to any potential struggles as soon as they arise will help to prevent any further billing issues or in the worst-case scenario – wrongful disconnections.

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