Electricity price hikes across Australia

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Electricity price hikes across Australia

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 the money is tight.

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

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

She said everyone is getting a price increase, but it just feels unfair that they've put so much on the daily rate.

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

She observed that energy retailers are saying it will be as much as 20 -- 30 per cent more.

In the three months to June, wholesale prices are at record highs compared to the same time last year.

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

Ms Young argued that the 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. The Australia Institute's climate and energy director Richie Merzian said that different states and territories regulate energy prices differently.

The regulated daily supply charges are in Western Australia, Northern Territory and regional Queensland. That price can continue to go up for Victoria, New South Wales and the Australian Capital Territory.

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

AEC chief executive Sarah McNamara said there was a lot of reforms happening in the energy market and they need to recover costs through bills.

For much of the east coast, the energy regulator sets up a default market offer DMO, which acts like a fall-back plan for customers who have not actively chosen a retailer.

Retailers are required to list the price on a customer's bill.

The DMO usually acts like a price ceiling and retailers compete for customers by offering deals cheaper than that.

Some electricity retailers are offering plans that are more expensive than the default market offer.

Ms McNamara said we are seeing competition.

In a remarkable move, a number of small electricity companies have told their customers to go elsewhere or face a huge hike in their power bills.

It is not profitable for some to continue to service customers and four small companies have collapsed.

There is more concentration in the market, and we're seeing that already, Mr Merzian said.

There's less chance of shopping around and finding cheaper electricity prices. The competition watchdog is monitoring retailer pricing and will provide an update to energy ministers later this month.