Big three energy retailers propose price drops, but low-electricity users could be caught out

A shake-up to electricity rates means lower-energy users could face a surprise hike to their electricity bill in the new financial year despite proposed price drops.

With electricity price change notifications now landing in people’s inboxes and mailboxes, Australia’s three biggest energy retailers — Origin, AGL, and EnergyAustralia — have confirmed average price changes for market plans in the new financial year.

Origin, AGL and EnergyAustralia have forecast expected annual price drops of as much as 8.7% in one case, but an average increase of up to 1.8% in another.

For an average household, Canstar estimates this could translate into as much as a rise of $32 a year or as much as a drop of $174 a year, depending on where they live.

This is despite confirmed drops in all networks except South Australia to the benchmark prices announced by the energy regulators last month (see list at end).

'Market' plans are competitive plans, with prices and rates set by the retailers themselves. Most customers are on a market offer, although many households may still be on standing/default offer plans, which act as a price safety net but tend to be more expensive.

The price changes for market plans from the big three come into effect on 1 July for customers in NSW, south east Queensland and South Australia, and 1 August for Victorians. 

Source: Canstar. Average is across all tariff types. Excludes DMO / VDO plans, existing customers only. AGL changes based on price from same time last year. QLD is Energex network only. Price changes in Victoria take effect on 1 Aug. All other states listed are 1 July.
Note: WA, north QLD and NT are operated separately from the national energy market.

Lower electricity users could see price hikes instead of drops

Customers receiving their electricity price notifications may find the rates for their electricity use are set to drop, but their supply charge – that is, the cost of being connected to the grid – are due to rise significantly, with some households reporting increases to their daily supply rate of over 70%.

As a result, some lower electricity consuming homes could end up seeing their overall bill rise instead of drop over the next 12 months.

Supply charges, which are not something many may have previously paid much attention to on their bills, can range from a daily cost as little as 54 cents to over 250 cents, based on current electricity plans on the Canstar database, with the average between 108-139 cents.

Source: Canstar. Based on single rate electricity plans on Canstar's database. Regional energy networks will differ.

How do I know whether I'm in a low energy consuming household?

A household’s energy use will depend on the number of people living within it, whether they have solar, the appliances they use regularly and the climate they live in, but on average:

• Low - 8.5 kWh a day, or 3,103 kWh a year
• Medium - 15kWh a day, or 5,475 kWh a year
• High - upwards of 21.6kWh a day, or more than 7,884kWh a year

Canstar's Data Insights Director, Sally Tindall, says, “While the announcement that electricity prices will primarily be dropping for market plans from the big three retailers is a welcome reprieve, for some households, the devil could still be in the details of your next bill.”

“Some energy providers are shaking up how they charge for power, with a bigger proportion of the bill now going to the daily supply charge.

“The regulators have capped how much the supply charge and usage charges must be on the benchmark plans for the 2026-27 financial year, and some providers are mirroring this split in their market plans.

“As a result, some customers are looking at their price notifications and noticing that while their usage rates might be dropping, their supply charge is seemingly going through the roof, with anecdotal reports of hikes of more than 70 per cent in some cases.

“This reweighting of energy tariffs puts the spotlight on how much power you consume. If you run a busy, high-energy household, the deep cuts to usage rates are likely to eclipse the higher fixed fees.

“However, for low-energy users these new daily supply charges could mean your bills may actually rise.

“An automatic price drop from your current provider is good news, but it shouldn't be an excuse for complacency. That’s because existing plans are rarely the sharpest deals on the market. 

“With energy pricing going through such a major shake up, households should take the opportunity to stop, understand their electricity use and compare their options.”

Source: AER. Based on domestic flat tariff for the 2026-27 financial year for a residential property without a controlled load. The AER’s average household electricity use is determined by the regulator and varies across networks.

Source: ESC. Prepared by Canstar. Prices are estimates for an average household using 4,000 kWh/yr on a flat tariff on the default offer.