Retailers say fixed-rate electricity plans are not as popular as some might think. Credit:Darren Pateman In Victoria, a spike next year is expected to be followed by a slight fall in 2018-19 as new wind farms - mainly driven by the state's renewable energy target - start operating and reduce a reliance on electricity imported from interstate. The increase averages out to 3.5 per cent a year. South Australia is expected to follow a similar jump-then-smaller-reduction pattern as it also builds new wind energy. In NSW, households are expected to face a 3.9 per cent average annual rise, most of it felt in the second year. But bills in Queensland and Tasmania are actually expected to be lower in two years due to other factors offsetting the impact of Hazelwood's closure. The biggest rise will be in the ACT, where households can expect a jump of more than 9 per cent, overwhelmingly due to the territory's 100 per cent renewable energy target.

The report's findings were seized on by the Turnbull government, which is determined to frame federal Labor as the party of higher electricity prices. Energy Minister Josh Frydenberg said the country was moving to a low emissions future, but stressed that only the Coalition had the policies to ensure electricity prices "don't increase more than they have to". "Energy security remains our No.1 energy policy priority. It is Bill Shorten and the Labor Party, with its 50 per cent renewable energy target, that wants to drive up power prices by accelerating the closure of coal-fired generators like Hazelwood," he said. His comments follows a disastrous week for the minister and the Coalition, in which Mr Frydenberg raised then ruled out considering an emissions intensity scheme for the electricity industry following a backbench revolt. Prime Minister Malcolm Turnbull declared prices would be lower under his government, but modelling suggested an intensity scheme could keep national electricity bills up to $15 billion lower than other measures, including doing nothing, by reducing the cost of cleaner energy.

An extraordinary collection of 18 groups - including the Business Council of Australia, the Australian Industry Group, aluminium and steel industry bodies, energy groups, the ACTU, and welfare and environmental organisations - issued a joint statement on Tuesday urging action to "avert a systemic crisis". They called for all options to be left on the table during a climate policy review next year - code for the government to re-consider an emissions intensity scheme, among other measures. "The status quo of policy uncertainty, lack of coordination and unreformed markets is increasing costs, undermining investment and worsening reliability risks," the statement said. "This impacts all Australians, including vulnerable low-income households, workers, regional communities and trade-exposed industries. Victorian Energy Minister Lily D'Ambrosio said the energy market commission had confirmed what the state government had consistently said - that the decision by French owner Engie to close Hazelwood would lead to price rises of about 4 to 8 per cent.

"Everybody is sick of the lack of leadership and silly political games being played by the Commonwealth, let's get on with it and do what we were elected to do," she said. NSW Energy Minister Anthony Roberts said the commission report once again highlighted the importance of all states and territories working together. Referring to state-based renewable energy targets in Labor-led states, he said energy policies in other jurisdictions were felt across the country. "We now have a situation where the decisions of other states are not only placing their own energy security at risk, it is impacting the wholesale price of electricity for the rest of the country. That's why it is imperative that at [Wednesday's] meeting we all commit to energy policies in the best interests of customers right across the country." In a report to COAG last week, chief scientist Alan Finkel said the electricity grid was undergoing unprecedented and irreversible change, and investors had lost confidence and wanted a coordinated national approach to energy and climate policies. He cited evidence that an emissions intensity scheme would be a relatively cheap and secure way to help meet emissions reduction targets.

Electricity prices are already historically high mainly due to over-investment in poles and wires, but also because of inflated gas prices. Energy market commission chairman John Pierce said decisions to close coal-fired plants would increase prices in most places, with significant variation depending on where you live and how much electricity you use. He said wholesale electricity costs - making up between 40 and 50 per cent of bills - were a key driver in customer bills. "These costs are increasingly connected with the mechanisms used to achieve emissions policy objectives – that is, how the energy sector will contribute to the emissions reduction target set by the government as part of the Paris commitment," said Mr Pierce. Wholesale prices have been suppressed in recent years as the country has had an excess of electricity. It has allowed nine coal plants to close over the past seven years with limited impact on prices in most states.

Loading While bills are expected to rise in most states over the next two years, Queenslanders and Tasmanians are expected to pay less than they are now due to the declining cost of a solar scheme and falling network costs respectively. Western Australians, who are not connected to the national grid or affected by Hazelwood's closure, are projected to face a bill rise of 7 per cent a year.