The AEMC’s annual report on household price trends looks at what is driving changes in the underlying cost components of household electricity bills. It analyses the competitive market sectors of wholesale generation and retail; the regulated networks sector; and price implications from government environmental policies.

Wholesale costs are estimated to increase by between 5% and 15% each year over 2015/16 to 2018/19 in most states and territories, while demand remains flat.

The closure of the Hazelwood power station in Victoria will lead to wholesale price increases in most states. The report estimates the national average residential bill will be $78 higher in 2018/19 due to Hazelwood retiring, compared with Hazelwood continuing to operate.

The report also shows significant variation in wholesale prices across the states.