Australians 'panicked' as energy prices soar, consumer advocates say - ABC News

Australians ‘panicked’ as energy prices soar, consumer advocates say – ABC News

Robert Meggs likes to keep a close eye on how much electricity his family uses.

It’s one of the main reasons why he switched to a smaller retailer some time ago while looking for a better deal.

“We have no water in the city, no sewers and no gas,” said Miggs, who lives near Kulnura on the central coast of New South Wales.

“We depend on electricity to run the water pump that supplies water to the house and for lighting and cooking as well.

“So, it is very important to us.”

But soon after the new service went live, he received news that left him stunned – its prices have more than doubled since July.

Thousands of consumers have received similar alarming notices from energy providers amid predictions of a UK-style energy crisis poised to sweep across Australia.

Experts say millions more are likely to be affected soon.

‘Panic began to appear’

One Big Switch campaign manager Joel Gibson said the demand for consumer advocacy group services and advice has skyrocketed.

“I think the panic is just beginning,” Gibson said.

“This is now being reported in full in every newsletter across the country in the last couple of days.

Gibson said the exorbitant cost of wholesale electricity was wreaking havoc on the retail electricity market.

A large power station with two tall concrete chimneys surrounded by transmission lines and a lake.
Coal still supplies much of Australia and prices for this commodity are booming.(Supplied: AGL)

Prices jumped more than 140 percent in the twelve months to the end of March, and Gibson noted that gas prices have risen alarmingly.

Much of the upheaval has been driven by a sharp rise in the prices of coal and gas, which account for much of the electricity generated in the national electricity market.

As a result, he said, many retailers are at risk of going out of business.

Meanwhile, he said, providers are rapidly withdrawing competitive offers from the market and seeking to pass price increases of unprecedented size.

“I think there’s real cause for concern because we’ve never seen anything like this before,” he said.

“We’ve never seen a price hike from many retailers of more than 100 percent, which we’ve seen in the past two weeks.

“We’ve never seen wholesale gas prices as they are at the moment – the regulator actually had to cap wholesale gas prices to keep them from getting out of hand.

It is also believed that many retailers are refusing to register new customers amid fears that they will face increased losses if wholesale electricity costs rise.

Customers who are unable to find a retailer are forced to procure their power from so-called suppliers of last resort, usually large incumbent providers such as Origin or AGL.

Australia in a severe storm

This assessment comes after the new Federal Treasury Secretary Jim Chalmers expressed concern about the state of the energy market in Australia.

Separately, Victoria’s Basic Services Commission released figures showing that more than 3,500 families cut their services in February for not paying their bills.

Flat laying of a calculator, electricity bill, and mobile phone showing the ABC article on electricity prices.
Charging a phone or laptop is about to get more expensive for most families.(ABC News: Natasha Johnson)

Lobby group Consumer Action jumped on the numbers to call on retailers to “do more to help families and people who are having trouble paying” their bills.

Chalmers said Australia was paying a price – at least in part – for nearly a decade of energy policy uncertainty under the previous coalition government.

“On energy in particular, this is an incredibly challenging set of conditions, especially for the Australian industry, when you think about this rise in gas prices, which goes hand in hand with higher prices for liquid fuels and a rise in the price of electricity as well,” said Mr. Chalmers.

Gibson urged consumers to shop while there are still options amid what he said may be a season of steep price hikes.

Consumers must be fast

Overhead view of an LNG tanker off the coast of Western Australia with a helicopter hovering over its airstrip.
Booming gas markets have been a boon for exporters and a blow to domestic users.(Supplier: Woodside Energy)

Gibson noted that 12-month fixed-price deals were disappearing from the market as retailers sought to reduce their exposure to high wholesale costs, which meant customers had to act quickly.

“We’ve been warning for months that this is going to happen,” he said.

“We didn’t even expect it to be this bad.

He said his foundation has been advising people, if they can, to switch to a really good 12-month flat rate plan.

“Now, unfortunately, they are disappearing day by day,” Gibson said.

“The most important thing for people to know is that they must not ignore this price hike rhetoric and they must be prepared to move in and shop.

Miggs said he switched to another retailer after his former supplier announced price increases of up to 130 percent.

Get Rid of Politics: Users

A man in a jacket sitting on his balcony
Central Coast resident Robert Meggs was shocked by the proposed increase in electricity prices.(ABC News: Ross McLoughlin)

The 60-year-old said the market had become noticeably more difficult for consumers and he would still pay more for electricity.

Miggs said that while he would be able to absorb the increase in cost, he acknowledged it would be a heavy burden for many other families.

He hoped that politics could be taken out of the equation after more than a decade in which energy policy was mired in intense partisan debate.

“I think I hope that will change and that people will be more fair and realistic about it.”

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