RETAIL electricity and gas prices in NSW were on the rise, and discounted offers were harder to come by, the Independent Pricing and Regulatory Tribunal (IPART) has found in its latest draft report on the state's energy market.
The draft report finds "the energy market is undergoing a period of volatility with higher retail energy prices" and "unprecedented" wholesale prices.
IPART said retail prices for a median power consumption of just over 4000kwh of electricity for householders and 20 megawatts for businesses rose over the past year by between 2.1 per cent and 8.4 per cent, depending on the retailer.
"We found that the average discount off the standing offer for the median market electricity offer has dropped from around 15 per cent in May 2022 to less than 2 per cent in August 2022," pricing tribunal member Sandra Gamble said today.
The report finds the numbers of retailers have begun to fall for the first time since electricity was deregulated in 2013-14, from 40 in 2021 to 35 in the year to June 30 and down to 27 by the end of August.
"Prices have generally risen over 2021-22, but the steepest increases have occurred since June 2022," the report says.
"This is a reversal of the trend of falling prices in previous years.
"In response to higher prices and the behaviour of some retailers, customers may be increasingly switching to, or back to, larger retailers in a 'flight to safety' in a market under stress.
"Although the annualised switching rate is similar to previous years (around 19 per cent) there is a notable spike in switching in July 2022."
The domestic coal market in NSW has traditionally operated on a separate - and lower - pricing structure than the export industry, but IPART says the higher retail prices are "largely the result of changes in the global market".
"Average wholesale electricity and gas spot prices have increased significantly, driven by higher global coal and gas prices and coal-fired generation outages," Ms Gamble said.
"The impacts of these changes on retail prices emerged towards the end of the 2021-22 financial year and more impact is likely to be felt in 2022-23."
Ms Gamble said the "tough market for customers" meant it was "important to shop around".
"A typical customer could save up to $60 per year by shopping around," Ms Gamble said.
"Some customers might be able to save a lot more if it has been a long time since they compared what's on offer."
The report found that retailers had cut their price discounts and that prices were now closer together between the various retailers than at any time since IPART began monitoring. The median discount for residential pricing had fallen from 15 per cent in May to less than 2 per cent in August.
It found that 79 per cent of customers bought their power from "the big three' retailers - Origin Energy, EnergyAustralia and AGL Energy - with 95 per cent covered by the top 10 of the 27 remaining.
The fourth biggest retailer was Red Energy (owned by Snowy Hydro), with 8 per cent of the market.
IPART described the current average wholesale power prices as "unprecedented".
"We have seen some retailers charging more than the reference price for electricity," Ms Gamble said.
"It is particularly important for these customers to shop around for a better offer. Customers should also investigate using more energy efficient products to save on their bills."
A synopsis of pricing movements in the report shows wholesale gas prices more than trebling in a year, rising from $8.20 a gigajoule in the June quarter last year to $28.40 a gigajoule this June quarter.
In the same period, average wholesale electricity prices went from $85 a megawatt-hour to $264 a megawatt-hour. Spot prices were above $300 a megawatt-hour for 26 per cent of the time, compared with 1 per cent previously.
IPART is encouraging the public to compare various retail power offers on a NSW government website, Energy Made Easy.
It is also promoting a privately rung website, Plug In, that it says provides "independent" information on new energy technology.
IPART is taking submissions on today's draft report until the end of this month, with a final report to NSW Energy and Environment Minister Matthew Kean by the end of November.
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