Eastern Australia faces a severe energy cost challenge. Gas and electricity prices increased to extraordinary levels in 2017, before recovering significantly in 2018. However, prices are expected to remain far above their historic averages for the foreseeable future. Businesses, particularly those in energy intensive industries, are under pressure. Steep energy price rises are proving difficult to pass on to customers and are squeezing margins across a wide range of industries. All else being equal, rising energy costs make Australian industry less competitive compared to overseas firms. Hard decisions must be made to ensure Australia’s energy system will be secure and affordable into the future. This report seeks to answer three key questions about the eastern Australia energy cost challenge and provide recommendations for a lower cost energy future.