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Destructive wave of energy price hikes about to hit Read mo


Source: Financial Review

A destructive wave of energy bill hikes is poised to sweep across businesses and households from July 1, with some commercial customers to be hit by a tripling in electricity prices after the closure of the Hazelwood coal generator.

The news of the hikes coincides with a sudden escalation of concern over the stretched east coast gas market after the unexpected shutdown of a major offshore platform in the Bass Strait just ahead of a cold snap in the south-east.

The shutdown has cut gas supply from the biggest supply source for the east coast by 15 per cent and triggered a sharp spike in wholesale gas tariffs, underscoring the pressures being felt across the energy sector.

Businesses coming off multi-year electricity contracts signed when the power market was in oversupply will suffer worst in the wave of retail price increases, seeing jumps in their total energy bills that will dwarf the up to 20 per cent hikes that some households are facing.

Victoria-based Wilson Transformer Co is bracing for an 83 per cent surge in its annual power bill from about $800,000 to almost $1.5 million, including a more-than-threefold jump in the electricity component of the charge, said executive chairman Robert Wilson. Its price for peak power is going from just under 4.4¢ a kilowatt-hour to about 15.4¢, while its off-peak tariff will jump from just over 2.5¢/kWh to about 9.65¢.

"It's been a shock," Mr Wilson said. "We can't change our prices because we are an import-export competing business so it's just straight off the bottom line."

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