Big energy companies AGL and Origin Energy have been found to have engaged in what one expert claimed was extreme price gouging. And their actions mean Australian households have been charged $1,000 a year more than big businesses would be charged for using the same amount of power!
In a unique case of bill shock, Matthew Benns reported the following: “Analysis of AGL’s half yearly results shows the cost of electricity for ordinary Australian households has jumped by $100 a megawatt hour but for big business it has gone up by just $30. Origin Energy bumped up residential bills by $72.30 a megawatt hour but hit business with just a $4.10 increase.”
“This looks like one of the worst examples of price gouging we have seen by big business in Australia,” said David Richardson, a senior researcher at The Australia Institute, who did the calculations for this Telegraph story.
The price gouging coincides with Origin Energy doubling its profits in the last six months from $399 million to $995 million, while AGL’s profits were up 78% and EnergyAustralia’s tripled its local revenue to $94 million.
Given PM Albanese has the big supermarkets on notice for price gouging, it seems only fair that these new identified price gougers are put on the shortlist for Prime Ministerial persecution!
But is this a fair comparison? The power companies say no, arguing that bigger businesses are easier to service, while small residential properties are relatively dearer. In economics, we call it economies of scale, meaning as you do something on a bigger scale, the average cost comes down
“When the whole country is suffering in a cost of living crisis, how can they happily go along bumping up profits and price gouging?” Mr Richardson asked. However, David Richardson isn’t backing down on the matter, reminding us that the difference for a measurable amount of power for big business to a household used to be $131 but recent price rises have taken it to $198.50 over the past year!

As they say to criminals in UK police dramas: “Gotcha!”

Matt Benns told us that “…the average household uses 2.76 megawatt hours of electricity every six months. That is costing them $276 more for six months than the previous year – $552 more a year.”

And that means “AGL household customers are paying just over $1,000 more than a big business for the same amount of electricity.”

The ball is actually now in Energy Minister Chris Bowen’s court, as he has promised to get prices down by $275 by the end of 2025. But so far, the independent Australian Energy Regulator has had no success in holding back this price gouging.

Power companies have payment assistance plans but these don’t really deliver price cuts and given the Government’s policies to promote alternative sources of power, it has to be duty bound to stop power companies price gouging.

Clearly, these claims have to be tested to see if David Richardson is right. If he is, Chris Bowen needs to act with full force, as energy prices have contributed to high inflation, which in turn has led to higher interest rates.

The cost of living is now the number one issue for Australian voters and the Government can’t afford to sit back and ignore this huge story.