Energy Price Hikes Set To Continue In 2018
Australia’s largest energy retailer AGL has announced plans to increase power prices in the new year. This comes on the back of recent predictions from EnergyAustralia and Origin Energy, who recently foreshadowed new year default power price hikes of 14.4 to 14.9 percent.
AGL has revealed that consumers will be faced with an average standing offer increase of around 9.5 per cent from January 1, 2018. However, the company maintains that many of its standing offer customers will be protected from next year’s rise due to additional discounts.
According to the AGL, non-concession households who have been with AGL for two years have already received a significant electricity discount, and will now receive a second rebate to offset the rate for 12 months.
Melissa Reynolds, Chief Customer Officer at AGL said the company has worked hard to minimise the price increases passed on to customers, and that while the price rise reflects a large wholesale increase in prices, it also takes into account a reduction in network costs.
“We understand that prices are high and that more needs to be done for energy affordability. This includes ensuring customers understand pricing offers, giving customers the tools they need to understand their energy usage and helping them with energy budgeting,” Reynolds said.
AGL has more than 1.1 million small market customer electricity and gas accounts in Victoria and the price hike will see annual bills rise by about $140, according to an article published in The Herald Sun on December 4, 2017.
The Queensland Compensation Authority claims that electricity prices are forecast to increase by 1.0 to 2.3 per cent for typical small electricity customers and by 1.5 to 3 per cent for typical large electricity customers in 2017-18.
“The main reason electricity prices are forecast to increase is because of rising wholesale energy costs and large-scale renewable energy target costs (LRET),” QCA said.
The QCA’s consultant, ACIL Allen reports that wholesale energy costs are expected to increase in 2017-18 as a consequence of the tightening supply-demand balance within the National Electricity Market (NEM) and increasing fuel costs for gas fired power stations.
“These can be attributed to an increase in demand from in-field gas compression from LNG associated export facilities, limited investment in new generation capacity in the NEM and in Queensland to balance out increased demand and the planned shutdown of the Hazelwood power station in Victoria.”
The expected increases are indicative of recent price hikes across the Victorian network and emphasize the need for households and business owners to take control of their spiraling energy costs.
Although locking in energy rates or switching providers may be a viable option, additional costs may apply. The only way customers can ensure they get a good deal is to research the market and compare the range of energy plans available.
It is however imperative to be aware that the big discounts being offered by energy retailers may not necessarily result in lower bills. What many don't realize is if you do not meet conditions which make you eligible for the discounts, you may end up paying more.
If this sounds too difficult, an energy broker can help consumers find the best deal possible to suit their individual needs.
Author: Ashling Kwok
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