15% Electricity Price Hike for Synergy Customers

West Australians residents are being warned they may face a 15% price hike in electricity bills over the next two years.

The 15% figure is designed to reflect the true cost of electricity, closing the gap between the government-subsidised price WA residents pay, and the true price delivering electricity costs the state-owned energy retailer Synergy.

This increase is part of the state government’s plan for the electricity market to achieve full retail contestability. According to the new State Treasurer, Ben Wyatt, the gradual increase will give Synergy time to make itself competitive when their monopoly over the WA residential electricity market is ended, bringing the state into line with the rest of Australia.

"Power bills will have to increase effectively to allow Synergy to compete in a competitive environment," Mr Wyatt, "Competition can have a much better outcome (for) power bills than a state-based concession regime.

"There is a peculiar scenario we have where power bills will need to increase over the next couple of years to get there."

Despite immediate electricity bill increases, residents are being told by the state government they will ultimately be better off, as bills are expected to fall when the market is open to competition from other providers, just like the commercial sector.

However, Opposition Leader Mike Nahan pointed out that the new Labor Premier Mark McGowan said that the former government’s 3% electricity price increase was "mean-spirited penny pinching from a government that simply doesn't care".

Dr Nahan also when on to say that the government was slugging WA residents with taxes that were needless, "Make no bones about this, the reason they are doing this is they are using Synergy as a taxing mechanism to fund their $5 billion (pre-election) commitments... the elephant in the room."

The electricity price increase will be revealed in the upcoming State Budget, and is currently expected to be 7% for homeowners on the A1 Tariff.

Solar is one of the best ways to protect yourself against electricity price rises without waiting for the market to become contestable. To find out just how affordable solar is, click here for a no obligation callback.