AGL, Origin and Red Energy customers face major power bill increase
Australians are poised for yet another round of bill shocks with three of the country’s residential electricity providers raising prices by up to 30 percent.
AGL and Origin Energy have confirmed that customers in NSW, South East Queensland and South Australia will see cost increases of 21.2 to 29.8 per cent from July 1.
Red Energy also raises prices by more than 20 percent and raises the service to property fee by 42 percent.
Victorian households will receive an average of 25.5 percent more on their bill from August 1.
AGL and Origin to raise electricity prices for NSW, SE Queensland and SA customers from July 1 and for Victorians from August 1 as wholesale power prices rise
The walks translate to about $540 extra on the average annual AGL bill for NSW households, about $565 for South Australians, about $447 for those in Queensland and about $341 for Victorians.
Origin residential customers in NSW will see an average increase of $407, while those in South Australia will see an increase of $405, those in Queensland $347 and those in Victoria $361.
Small business customers of Origin Energy in the same regions will also receive an increase of between 20.5 and 27.3 percent at the start of the new financial year.
AGL and Origin companies supply electricity to nearly half of all Australians, accounting for 49 percent of the residential market and about 47 percent of the small business market.
Wholesale energy costs, which account for about one-third to one-half of final bills, remain the main driver of higher retail electricity prices, according to Australia’s energy regulator.
Gas and black coal price caps introduced in December 2022 prevented even bigger price hikes for consumers, AER chairman Clare Savage said.
Origin and AGL have said they will provide additional support to customers as the increases are implemented.
Origin is the country’s largest residential electricity supplier, followed by AGL, who together control about half of the entire Australian market
AGL’s Staying Connected financial hardship program offers a $400 winter bill credit for eligible customers.
While Origin’s Power On program offers significant discounts for those in need.
“We are protecting existing customers in our Power On hardship program by shielding them from these price changes so they are not affected,” said John Briskin, head of retail at Origin.
“A range of support is available to customers… including flexible payment plans, custom debt management, energy efficiency advice, access to government grants and concessions, and referrals to financial advisors.”
Shares in AGL rose 14.3 percent, or $1.38, to $11.04 in Friday morning trading.
Damien Nicks, CEO of AGL, announced the better prospects for shareholders this year and next, saying the company relies heavily on wholesale prices, which have risen significantly in recent years.
“We are well aware of the impact on our customers during this inflationary period,” Mr Nicks told AAP.
“It’s a tough period for everyone.”
In the midst of rising energy poverty, Mr. Nicks encouraged customers to move from quarterly bills to monthly bills to help manage cost-of-living pressures.
As Australia’s largest emitter, the company will spend up to $10 billion over the next eight to 12 years closing aging coal-fired power plants and replacing them with renewables and fast-start gas units.
AGL continues to aim for a full phase-out of coal-fired generation by the end of FY35.
There is a slow shift from coal to renewable electricity, but it will be at least a decade before the country is weaned from fossil fuels
Meanwhile, Origin Energy will build a large battery on the site of Australia’s largest power station, Eraring, while also preparing to exit coal-fired power plants.
It has pledged $600 million for the first phase of the large-scale battery project.
Origin said it will continue to assess the market, which will help inform when it will close all four units in Eraring, near Lake Macquarie.
The NSW government has not ruled out intervening to keep Eraring open beyond its planned 2025 closing date, as it supplies about a quarter of the state’s energy needs.
NSW Premier Chris Minns said the government needs to look into commercial decisions made by energy companies in NSW.
AGL’s Liddell coal-fired power station in the Upper Hunter, which until recently provided 10 percent of the state’s electricity, will also be replaced by renewable energy and large batteries.
“It is important that electricity consumers in this state have a stable, reliable source of power and there are major challenges there in terms of the renewable energy revolution,” said Mr Minns.
“We believe if we follow the path right, we can put downward pressure on bills and ensure that energy is reliable.”
Massive investment in battery storage will be needed to meet Australia’s needs when wind and solar power are dormant
Greg Jarvis, head of power supply and operations at Origin, said Eraring is a strategic location that can provide power to major centers of demand.
“The development of the Eraring battery is an important next step as we look to transform the Eraring site for the future given our intention to phase out coal-fired generation as early as August 2025,” he said.
Mr Jarvis said Origin will also be ‘actively communicating’ with the market operator, the NSW government and the local community about plans for Eraring to close.
Phase one involves the construction of a 460 megawatt battery storage system that is expected to be commissioned in the last three months of 2025.
Origin has the option to increase the battery to 700MW and double the transmission time to four hours, under pre-existing approvals.
The battery equipment is provided by Finnish technology group Wartsila, while design and construction services are provided by Enerven, a subsidiary of SA Power Networks.