Electricity price increases hit businesses from July 1

Business owners and households in most states of Australia have woken up to higher electricity prices this morning, with increases as high as 13% in Queensland and parts of New South Wales.

The price increases, which in most cases are the result of decisions taken by state energy regulators, are being driven by a range of factors, including rising production costs and infrastructure costs.

In Queensland, prices will rise by an average of 13%. Research by price comparison website MakeItCheaper.com.au, which focuses on the SME market, suggests the increase will result in a $60 million increase to the electricity costs of the state’s businesses.

Electricity prices will rise by an average of 10% in South Australia, by between 6% and 8% in Tasmania and by around 10% in Western Australia.

In New South Wales, prices will increase by 7% to 13% depending on which retailer a customer is with (Integral Energy’s prices are up 7%, Energy Australia’s prices are up 10% and County Energy prices are up 13%).

Northern Territory electricity prices are up 5%.

There are also increases to water charges in Queensland, New South Wales, Victoria and Western Australia.

Tim Wolfenden, CEO of MakeItCheaper.com.au, says the Queensland market is where SMEs will be hardest hit. A local corner shop is likely to see its electricity costs increase $320 a year, a cafe or restaurant by $1,200 a year and a larger business by up to $3,000 a year.

But the Queensland market is opening up to competition, and Wolfenden says SMEs need to take some time to start shopping around for a cheaper supplier.

“The ones hardest hit are the businesses that have never switched before and have never tried to shop around,” he says.

“It feels like not enough people are aware that their bills are going up and they can do something about it.”

He says there are 11 retailers operating in Queensland and savings of up to 20% are possible if a customer can snare a good deal.

“No one’s locked into a contract they can’t get out of, and any penalties for breaking a contract are quickly recouped when ongoing costs are slashed.”

“Loyalty doesn’t always pay. In fact, it could end up costing you your business in the long run.”

SMEs in Victoria, New South Wales, South Australia or the Australian Capital Territory can also compare and switch electricity suppliers, although the other states and territories are yet to deregulate their markets.

“Switching supply shouldn’t be a once in a lifetime purchase,” Wolfenden says.

“It should be like your car insurance – an annual buying decision that you need to stay on top of.”

Other areas SMEs should watch out for higher charges include:

• Vehicle registration fees around the country.
• Parking levies in Sydney.
• Infrastructure charges and levies in Western Australia.
• Taxi fees in NSW.
• Other government fees and charges around Australia.