Energy bills enter volatile period – but relief is coming

It’s heater weather across much of Australia as we enter the second month of winter. And the mere mention of heaters is enough to turn most minds to energy bills. Just what can we expect energy prices to do over the next few months and beyond?

Judging by mainstream media, the answer to that generally depends on which politician you ask, be that state or federal. An opposition spokesperson will almost certainly tell you that the prices will rise under the incumbent government. And those in government will undoubtedly tell you that their policies are helping to keep energy prices down. 

They can’t both be right, can they? While politicians can be almost guaranteed to toe the party line, predicting energy prices is definitely no easy task. The number of interacting factors make it difficult to forecast whether they will rise or fall – or neither. 

One factor is the energy retailers themselves, and even they at times seem to struggle to know which way prices are heading.

Paul Coughran, GM of utilities at Compare Club, highlighted this uncertainty. “It’s worth keeping a very close eye on electricity prices this month,” he said. “The information we’re receiving suggests that retailers are still figuring out how they want to price plans.” 

If they’re still figuring that out, what hope does the average Aussie punter have?

The impact of rising energy prices laid bare

Despite the ongoing cogitation of energy retailers, Mr Coughran says we should expect to see some movement in the market. “Wholesale energy prices are slightly up, while the Default Market Offer and Victorian Default Offer are both down in many states,” he said.

This creates a bit of a challenge for retailers, said Mr Coughran. So what should we average Aussie punters do? “My advice to households remains the same,” said Mr Coughran. “If you’ve not reviewed your energy plan in the past 18 months, then there’s a very good chance you could be paying too much.”

Shopping around, then, sounds like a very good idea, particular after a significant spike in energy prices last year. A report released by the ACCC shows that prices for residential customers across all regions grew by 14 per cent in the year to September 2023.

For many, the impact of that increase was crippling, according to the ACCC. Across that period, there was an 18 per cent increase in the number of consumers applying for financial hardship support.

What can we do?

To see if, as Mr Coughran suggests, you are paying too much for energy, then comparing prices is a start. It could indeed be a vital first step to reducing what you pay for energy. Energy retailers generally don’t make this easy, though, having such varied plans between them. 

However, the federal government’s website energymadeeasy.gov.au at least provides you with a sporting chance. According to Joel Gibson, from consumer advice centre One Big Switch, there are big savings to be made. 

“The cheapest offers on the market are around $200 cheaper than they were six months ago,” he said. 

With retailers updating their prices this month, the next few weeks might be the perfect time to compare and switch. That might just get you through winter – and until the next energy prices update, when we’ll do it all again!

Do you keep a close eye on energy prices? Have you noticed big increases on your bill? Let us know via the comments section below.

Also read: Lifetime costs on the rise, says Zurich

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