Electricity costs have gone up again this month.
Homeowners and renters have been told to check their next energy bill as it is likely to be a fair amount higher amid rate changes across various networks and uneven deals in the market.
Increases in energy charges came into effect over July and will affect hundreds of thousands of Aussies. For most, the increases will be about 25 per cent.
But Canstar analysis revealed the rises have not applied equally across networks.
This has led to vast differences among provider charges, with some lower cost electricity suppliers offering rates that would work out to be about $500 a year cheaper than the industry average, Canstar noted.
Canstar insights director Sally Tindall said the price gaps were often the result of differences in the size of each energy network, which meant they were passing on costs in varying ways.
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Compare the Market’s David Koch said 800,000 Aussies would be paying more electricity this month.
“The cost of electricity is made up of a number of different factors. While wholesale costs is one of them – which is the price paid to generators for energy – there is also network costs, retailer costs and environmental costs,” Ms Tindall said.
“The increase in many of these costs is, unfortunately, resulting in higher energy bills.”
Canstar revealed that some of the biggest price variances were across NSW, Queensland and Victoria.
The lowest cost plans in NSW from Essential Energy and Endeavour Energy were about $507 and $460 cheaper annually than the industry average, the comparison group found.
In Queensland, Energex’s lowest cost plan was about $444 a year cheaper than the industry average.
Victorian households could get electricity rates at about $314-$358 cheaper than the industry norm on the lowest cost plans from Ausnet, Citipower, Powercor and United Energy, the Canstar analysis showed.
Canstar insights director Sally Tindall said there were now large differences in prices across providers. Picture: Tim Hunter.
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Ms Tindall added that price changes this month were significant – albeit lower than those recorded over 2022, when the start of the Ukraine War and other factors sparked a global surge in energy prices.
“High demand for electricity, weather events and, on occasion, coal station outages over the last year have had an impact on wholesale prices,” Ms Tindall said.
“Network costs, that is, the cost of transporting energy to your home, is a major component of (prices). Depending on the network you’re on, these costs can form up to 48 per cent of an electricity bill.”
Compare the Market’s economic director David Koch said July increases in electricity costs would impact around 800,000 households on standing offers. These customers were simply “paying too much”, he said.
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“If you’re on the standing offer, chances are you’re already paying more than you need to for the very same electricity supply as your neighbours,” Mr Koch said.
“We know 80 per cent of households in the National Energy Market are overpaying for electricity because in so many cases there are better deals out there.”
Recent energy price increases reflect ongoing cost pressures on providers, Mr Koch said.
“Wholesale prices only account for roughly a third of your energy bill, and regulators consider an array of other factors when determining prices,” Mr Koch said.
“Firstly, network costs continue to rise for retailers. The cost of materials to maintain the network has increased and it’s costing more for distributors to read meters, maintain poles, wires and pipes and transform the grid.
The costs of maintaining Australia’s electricity network has been rising.
“People may not realise that there’s also a cost involved in meeting renewable energy targets. Outdated electricity grids and networks have been expensive to maintain and will cost even more to transform over the next 10 years.
“It’s regular Aussie families who will bear the brunt as some of these costs are passed on.
“None of these changes will happen overnight, so we could face a long, protracted period of price pressure.”
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