SA Power bills to rise by 9.5% in July

To add to the struggle with the surging cost of living, regulated electricity price caps in South Australia are set to increase by between $124 to $198 for households, and $459 for small businesses each year.

This sees an increase of up to 9.5% for households using 4200 kWh of electricity with controlled load (separate tariffs applied to appliances such as electric hot water storage systems) and 5.7 per cent for small businesses using 10,000 kWh of power.

This is set to happen by July, by the Australian Energy Regulator (AER) whom sets the Default Market Offer (DMO) – a regulated price cap that sets the maximum price that retailers may charge customers.

With about 65,000 out of South Australia’s 900,000 (7%) electricity consumers on the DMO, this will have an significant impact on many Australians with the current cost-of-living pressures.

In a statement on May 26th 2022, the AER said the DMO increase was prompted by a 11.8 per cent rise in wholesale electricity costs in South Australia over the past year, driven by unplanned power plant outages and the ongoing war in Ukraine.

AER chair Clare Savage said this year’s DMO determination was a “particularly difficult decision”.

“In setting these new DMO prices, we understand the significant impact they will have on some consumers who may already be struggling with cost-of-living pressures,” she said.

“We have given scrutiny to all factors affecting the DMO calculation and have set safety-net prices that reflect the current conditions and underlying costs to retailers.

“Our safety net DMO price will continue to protect consumers from unjustifiably high prices and will continue to provide the reference point from which consumers can shop around for a better deal.”

Savage said default offers were not the cheapest deal and customers could get around the price hikes by shopping around.

She said households could currently save around $443 or 24 per cent off their bill, while small businesses could save around $1308 or 29 per cent off their bill, by switching to a competitive market deal.

The Australian Energy Council, which is the peak industry body for electricity retailers, also urged customers to do their research.

“An increase to the DMO is news that most of us could have done without. No one likes to see prices rise, and with the current cost of living pressures, it’s important that consumers shop around for the best deal,” Australian Energy Council chief executive Sarah McNamara said.

“It’s also a good idea to contact your retailer and ask them for a better deal.

“The same goes if you’re concerned about, or are having trouble, paying your bill. Your retailer can help if you contact them.

“Switching retailers will also take less time than you think.”

The state opposition seized on the price hike this morning, calling on the Malinauskas Government to “reveal its plan to reduce power prices and ease cost of living burden on South Australians”.

It pointed to moves by the Queensland Government to introduce a $175 cost of living rebate on its local power bills as a potential solution to ease household budget stress in South Australia.

“Cost of living pressures are intensifying every day and Labor needs to act urgently to support South Australians,” the Liberals’ energy spokesperson Stephen Patterson said.

“Fuel prices and the cost of groceries are really starting to bite and Labor needs a solution to these issues right now.”

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