The Australian Energy Regulator (AER) released its draft decision to raise the default market offer - the maximum price energy retailers can charge customers - for southeast Queensland, and the states of South Australia and New South Wales. AER expects a 20-22% increase in prices for most residential customers and 15-25% for small businesses, but Chair Clare Savage said power bills could have risen by 40-50% if there was no intervention by the federal government to cap energy prices. The interventions in the coal and gas market have reduced price expectations for the coming year with contract prices falling by about 50%, Savage said.
In December, the Australian government said it would cap coal and gas prices for a year, a move criticised by power producers who said it would deter future investment in supply. Significant volatility in global energy markets, due to a worsening supply crunch in the wake of the Russia-Ukraine conflict, and more frequent outages at coal-fired power stations have triggered power price spikes in Australia. Federal Energy Minister Chris Bowen said Treasurer Jim Chalmers was negotiating with his state and territory counterparts to include more relief in the May budget. "Those rebates will provide further relief over and above the package of interventions that we announced last year," Bowen told reporters. AER will make its final decision in May but said there would not be any big changes then as prices have become stable now.
Victoria's Essential Services Commission, responsible for setting the default prices in the state, tipped an average annual rise of 31.1% for households, or about A$426 ($285) and 33.2% for small businesses, or A$1,738 ($1,162). ($1 = 1.4959 Australian dollars)
(Reporting by Renju Jose in Sydney; Editing by Kenneth Maxwell)
