Australian households are set to face higher electricity bills in the coming months, adding to the pressure of the ongoing cost-of-living crisis.

The Australian Energy Regulator (AER) released its draft decision “default market offer” (DMO) today, which will see price caps for customers on standing retail plans lifted starting from July 1.

As a result, prices are expected to rise between 2.5 per cent and 8.9 per cent for customers in NSW, south-east Queensland, and South Australia.

Inflation-adjusted annual price increases of between $60 and $140 can be anticipated, depending on the area.

Small business customers could see rises between 4.2 per cent and 8.2 per cent.

Customers in Victoria, where the state’s Essential Services Commission sets its own default offers, could see annual prices drop by $19 in some zones but increase up to $68 in others.

The average across the five zones is a $12 increase from last year.

AER Chairwoman Clare Savage acknowledged it remained a challenging time for energy consumers.

“We know that cost-of-living pressures are front of mind for many households and small businesses,” she said.

“This is a very difficult time for many communities across northern New South Wales and South East Queensland who have been or remain without power following ex-Tropical Cyclone Alfred.

“We’ve seen cost pressures across nearly every component of the Default Market Offer (DMO), and we have given careful scrutiny to every element of the DMO cost stack to ensure prices are a reasonable reflection of the costs of a retailer to supply electricity.”