Victorian power and gas prices to surge, partly due to Hazelwood closure

Tens of thousands of Victorian households are facing steep hikes in their powers bills next year, partly because of the looming closure of the Hazelwood power station.

Consumer advocates warn the price spike could add up to $300 extra for the average annual household electricity and gas bills, and have urged people to shop around for the best deals.

Retail electricity prices for households on standard offers will surge by up to 11.5 per cent and gas prices by up to 9 per cent.

Last month Premier Daniel Andrews predicted domestic electricity bills were likely to be 4 to 8 per cent higher as a result of Hazelwood's closure, based on government-commissioned analysis.

Energy Minister Lily D'Ambrosio insisted the price rises amounted to "a similar range of increases".

She said a state energy market review would expose any price gouging by power companies.

"If the review finds that there is price gouging, our Government will take action," Ms D'Ambrosio said.

"We will immediately refer any evidence of price gouging to the Australian Competition and Consumer Commission."

The increases affect an estimated 10 per cent of households who remain on standard offers for retail electricity and gas, rather than competitively priced market offers.

'If you snooze you lose'

St Vincent de Paul Society spokesman Gavin Dufty said Victorians could expect to be slugged up to $200 extra for annual household electricity bills and up to $300 for both electricity and gas.

"Victoria has had relative price stability for the last two years so this will be a bit of a shock for people," he said.

"If people are lazy and not shopping around [power companies] will gouge.

"If you snooze you loose in this market, so I encourage people to shop around to get the best deal."

Mr Dufty said it was not clear what proportion of the price rises could be attributed to the Latrobe Valley power plant's closure, or if power companies were "trying it on".

But Australian Energy Council general policy manager Kieran Donoghue said there were "real cost drivers" behind the increases, particularly the wholesale electricity price.

"If one retailer wasn't cost competitive, then customers have the right to vote with their feet and go and choose another retailer," he said.

'Every household will feel the pinch'

Hazelwood generates up to a quarter of Victoria's electricity, but last month the ageing coal-fired plant's owner Engie announced it would permanently shut in March.

Opposition spokesman David Southwick said Victorians should brace for more power price rises.

"A 10 per cent increase without even the lights being turned off at Hazelwood demonstrates that Victorians need to brace themselves for more to come," he said.

"Every householder will feel the pinch."

Melbourne-based energy retailer GloBird Energy is hiking rates by 38.5 per cent.

Electricity price increases for small businesses range from 8 to 17 per cent.

According to analysis from the power bill comparison site Victorian Energy Compare, nine out of 10 consumers can save money by switching energy offers.

On Tuesday the Andrews Government announced a review of the state's electricity and gas retail market led by former Labor and Liberal ministers John Thwaites and Terry Mulder.