Winter arrives next week across southern Australia, and for millions of households, it brings a confronting question: how will they afford to keep warm without the government cheques that masked rising energy costs for the past 12 months?
The $150 energy bill rebates that households received in two quarterly instalments until the end of 2025 are gone. The Australian Government's expanded Energy Bill Relief Fund, which cost $1.8 billion to extend, concluded on 31 December. What remains is the unvarnished truth about electricity pricing in Australia.
Here is what the data reveals: electricity prices rose 32.2 per cent in the 12 months to January 2026, according to the Australian Bureau of Statistics. That number is alarming until you look beneath it. The underlying increase, excluding government rebates, was only 4.5 per cent. In other words, the scale of price growth was real, but government support was masking its full impact on household budgets.
For a typical household, annual electricity bills already run $1,400 to $2,200, depending on location and consumption. Add winter heating, which accounts for 30-40 per cent of household electricity usage, and costs climb significantly. Families relying on gas heating face additional bills reaching $1,000 to $1,300 across the colder months.
But here is the frustration that the ACCC has documented: customers who have stayed with the same electricity plan for more than three years are paying an average of $221 per year more than households on newly negotiated plans. This loyalty penalty exists because retailers offer discounts to new customers while letting long-term customers drift onto higher default rates.
The counter-argument from energy retailers is straightforward: customers have the freedom to switch. The response, equally straightforward, is that freedom to act means little if the transaction costs and friction involved in switching mean most households simply do not.
Yet the opportunity is real. Households that move from default offers to competitive plans can save between $100 and $250 annually, depending on their region. For a family already feeling winter's squeeze on the budget, that difference is substantial.
Beyond switching plans, the practical levers are familiar: improve insulation, reduce heating by one degree (which cuts costs by 5-10 per cent), or consider the Cheaper Home Batteries Program, which offers households a 30 per cent discount on battery installations.
The broader issue is structural. The ACCC's inquiry into electricity affordability continues, with a final report due by 30 June 2026. The question it must answer is whether a market that rewards retailers for customer inertia and penalises loyalty is functioning in the interest of households.
Winter is coming. The rebates are gone. The math, unfortunately, is unavoidable. But the action available to households is not mysterious. Switch plans. Improve efficiency. Hold the industry accountable for what comes next.