The extraordinary analysis reveals more than a third of what Australians hand over to energy giants AGL and Origin for electricity is pure profit for the companies.

The research – which crunches the companies’ own data – reveals $755 of what an average AGL electricity customer forks out each year goes directly to profit for the company, which made more than a billion dollars last year.

Origin electricity customers pump $595 a year into the company’s annual profit, which was more than $2 billion last year.

It’s a similar story with gas. The average Origin customer pours $417.57 into the company’s annual profit. $414.04 of what an average AGL gas customer hands over each year is pure profit for the company.

The discussion paper, by The Australia Institute’s Senior Research Fellow David Richardson, also reveals that households are massively subsidising the bills of big businesses, with consumers paying more than double what businesses pay for a megawatt hour of electricity or gigajoule of gas.

Key findings:

• AGL makes $755.01 profit per customer, per year for household electricity
• Origin makes $595.25 profit per customer, per year for household electricity
• AGL makes $414.04 profit per customer, per year for household gas
• Origin makes $417.57 profit per customer, per year for household gas
• Between June 1995 and June 2024, electricity prices increased at more than twice the rate of inflation.
• Between June 1995 and June 2024 gas prices increased at three times the rate of inflation.
• For every $100 of an AGL customer’s electricity bill $35 is profit, $34 goes to “network costs” (such as the cost of using poles and wires), $15 goes to “other costs” (such as advertising) and just $12 is spent generating electricity. $4 covers “depreciation and amortisation”.
• Households pay more than double what AGL and Origin charge big business for the same unit of electricity.
• Households pay 3.2 times more for gas from AGL than business
• Households pay 2.5 times more for gas from Origin than business

“This is a clear case of price gouging by AGL and Origin. They are the Coles and Woolies of the energy sector,” said David Richardson, Senior Research Fellow at The Australia Institute.

“In the case of AGL, the data shows that just 12% of what consumers fork out goes to generating electricity. So, any claim that high fuel prices are responsible for the huge increase in electricity prices just doesn’t stack up.

“Just last week, the Australian Energy Market Operator revealed a record number of Australians are now on hardship plans to pay for their power and gas. At the same time, AGL and Origin are raking in billions of dollars in profits. Australian consumers are being ripped off at a time when they can least afford it.

“Between them, AGL and Origin made more than $3 billion in profits last year. Privatisation has made these monsters where market forces should never have been applied.”