A woman with short hair, blue eyes and a blue jumper looks directly at the camera

Electricity retailers raise fixed charges to recover costs after record highs in spot market

Natalie, from Tweed Heads in northern New South Wales, has cut her electricity usage to the bare minimum.

“I don’t run a heater, I rug up … I don’t have a telly and I’m very careful about closing all the curtains,” she said.

“I’m doing pretty much as much as I can to reduce my electricity.”

Natalie is on a disability pension, so money is tight.

Natalie wears two jumpers instead of turning on her heater(ABC News: Steve Keen)

Like many people, she recently received notice that her electricity bill will be going up.

The usage component of her bill is only going up to a few cents, but the fixed rate part — the daily supply charge — is going up to 43 per cent.

“I understand everyone is getting a price increase,” she said, “but it just feels a little bit unfair that they’ve put so much on the daily rate.

“I can’t reduce my electricity consumption to reduce the daily rate.”

The New South Wales Energy and Water Ombudsman, Janine Young, said every customer would be seeing price increases.

“Some energy retailers are saying [it will be] as much as 20-30 per cent more,” she observed.

A woman with dark hair and dark glasses looks off-camera.
NSW Energy and Water Ombudsman Janine Young says all customers will be in for a price hike.(ABC News: John Gunn)

Wholesale prices are at record highs, tripling in the three months to June, compared to the same time last year.

The Australian Energy Market Operator (AEMO) said it was because of high commodity prices, coal-fired power outages and a cold east coast winter.

However, Ms Young argued, those increases should flow through to the usage charge — the cents-per-kilowatt on a customer’s bill — instead of the fixed daily supply charge.

“Retailers can charge an additional amount in that fixed part of your bill. And that’s not price-capped [in NSW],” Ms Young explained.

“It could be that some retailers are increasing that element to offset the wholesale price increases that they’re wearing.”

Different states and territories regulate energy prices differently, observed the Australia Institute’s climate and energy director, Richie Merzian.

A large power plant blowing smoke with green rolling hills in the foreground.
Coal-fired power still makes up a large portion of Australia’s total electricity generation.(ABC News: Freya Michie)

“The regulated daily supply charges are in Western Australia, Northern Territory and regional Queensland. For Victoria, New South Wales and the Australian Capital Territory, that price can float and can continue to go up,” Mr Merzian said.

Energy market ‘struggling with its own resilience’

The peak body representing power companies, the Australian Energy Council (AEC), has defended the price hikes.