The Australian Energy Regulator (AER) has proposed a significant rise in electricity prices for the 2025-26 period, which will affect both households and businesses across New South Wales, South-East Queensland, and South Australia.
According to a recent report from SBS News, these planned price hikes follow the release of the draft ‘safety net’ prices, which are set to take effect from 1 July 2025. The increase comes amid ongoing concerns about energy affordability for Australian consumers, especially in vulnerable communities.
What This Means for Consumers
The rise in energy prices comes as Australians continue to face financial strain due to high utility bills. For many households, especially those in vulnerable sectors, the expected increase will make life even more difficult.
Euan, a 61-year-old disability support pensioner living in social housing, explained that the rise in electricity prices would force him to cut back on essentials, including food and medication.
We’d have to really cut back and I’m talking about cutting back in food and maybe certain medications that I need – he said
Although I have air conditioning in the room that I’m in here, the rest of the house doesn’t have air conditioning and it gets very, very hot in the summer when we’ve had the heat waves – Euan added.
The Wider Impact on Vulnerable Australians
A recent survey by the Australian Council of Social Service (ACOSS) found that nearly two-thirds (around 67%) of respondents are already struggling with energy bills. In particular, groups such as First Nations people, renters, and those on income support have been hit hardest.
ACOSS CEO Dr. Cassandra Goldie emphasised the urgency of addressing these inequalities, saying,
It’s a complete travesty that in one of the world’s wealthiest nations people are getting sick, skipping meals and delaying medical appointments because they can’t afford to cool and power their homes
The survey also found that 50% of respondents were sacrificing food, medicine, or other essential items in order to pay their energy bills.
Among vulnerable groups, 88% of First Nations people, 76% of renters, 75% of income support recipients, and 72% of people with disabilities or chronic health conditions reported struggling with energy costs.
The Government’s Response and Future Energy Rebates
The federal government’s response to rising energy costs has included a $300 electricity rebate, which was extended in last year’s budget. However, as the rebate is set to expire soon, many Australians are calling for its extension.
A survey from Canstar Blue revealed that 80% of Australians believe the rebate should continue to help ease the burden on struggling households. Sally Tindall, data and insights director at Canstar, stated,
Soaring summer temperatures have sent many households’ electricity use through the roof, and while the temporary rebate has helped keep a lid on bills since mid last year, the clock is now winding down
Price Increases by Region
Under the AER’s proposed changes, energy prices in New South Wales (NSW) could increase by up to 8.8%, with controlled load customers facing bills between $2,714 and $3,174.
For other customers, prices could rise between $1,969 and $2,713. In South-East Queensland, prices for controlled load customers are expected to rise by 2.5%, with bills reaching $2,475, while those without controlled load will see a 5.8% increase, bringing prices to $2,185.
In South Australia, controlled load customers will pay up to $2,881, an increase of 4.4%, and non-controlled load customers will see a rise of 5.1%, bringing their bills to $2,713.
Small businesses are also expected to face price hikes ranging from 4.2% to 8.2%, with energy bills increasing between $4,439 and $6,183.
Experts, including Dr. Goldie, are advocating for long-term solutions to address rising electricity prices and energy costs, such as improving the thermal performance of housing and expanding access to solar energy.
Implementing these measures could provide more sustainable relief from the financial strain caused by high energy bills. The chair of the AER, Clare Savage, also voiced similar concerns, stating,
We’ve seen cost pressures across nearly every component of the DMO
With the consultation period for the AER’s draft decision on electricity prices open until April 3, 2025, and the final decision to be made in May, it remains to be seen how these proposals will shape the future of energy pricing in Australia.
