Origin Energy boss Frank Calabria has shared fears of electricity prices increasing by more than 20 per cent in multiple states from July 1 as Australia heads into winter.
Mr Calabria’s bleak forecast comes days before the Australian Energy Regulator (AER) is expected to release its default market offer (DMO), which places a maximum price cap electricity retailers can charge customers.
The price increase will hit customers in NSW, Queensland and South Australia, while a different process is used in Victoria and Tasmania. Western Australia and the Northern Territory are operated by separate markets.
The head of Origin Energy said energy prices could increase by more than 20 per cent from July 1. Picture: NCA NewsWire / Jeremy Piper
“I would just reiterate that (the price increase) is in fact recovering costs that were incurred by the industry, which if we cast our mind back to May and June certainly put the energy system under pressure,” Mr Calabria said at the Australian Financial Review’s Business Summit on Tuesday.
“Nevertheless, it’s going to be a contributor to cost of living, which we’re acutely aware of in terms of our customer base and supporting those that are less able to pay.”
The new price would come into effect from July 1.
A report released by Australian Energy Market Operator in March also warned of increasing energy unreliability and the potential for blackouts in NSW from 2025.
This comes as Eraring power station is slated to cease operating in 2025, with the opening for the Kurri Kurri gas generator project delayed until 2024 and the Snowy Hydro 2.0 project delayed until 2027.
The government has so far ruled out delaying the closure of Eraring, while Labor has left a potential extension on the table.
Operated by Origin Energy, it provides about 25 per cent of NSW’s energy supply.