Energex has been approved to hike residential power bills in the state's southeast by $165 and $220, to between $1620 and $1961, in 2022/23.
The Australian Energy Regulator has also permitted the retailer to hike business bills by $705 to $1620 next financial year.
To offset the hikes, the Queensland government will pass on a $175 rebate to households, capping power bill rises to a maximum of $45 and some households may end up with a $10 credit.
"People are having to make difficult choices including going without," Premier Annastacia Palaszczuk told parliament on Thursday.
"The $175 rebate will be provided on electricity bills and is only possible because the electricity assets in Queensland are owned by the people."
Ms Palaszczuk said energy retailers would automatically apply the credit to bills, so households do not need to apply for it.
The measure will cost $385 million in next month's budget.
The AER said wholesale electricity costs have risen almost 50 per cent in Queensland in 2022/23.
The average megawatt hour price soared 285 per cent this financial year to $171, its second-highest level on record.
Power bills were pushed higher by surging coal and gas prices, outages at coal-fired power plants and increased demand during warm, humid weather, the AER said.
Network constraints also reduced Queensland's ability to import cheaper electricity from NSW during outages.
More than 80 per cent of Queensland's electricity comes from coal-fired power plants.
The AER said generators had been lifting their offer prices in the middle of the day when demand fell due to higher solar output.
"Coal generators have been shifting their capacity to higher prices to avoid uneconomic dispatch," the regulator said.
"Increasing fuel prices may also have influenced black coal generators to offer their capacity at higher prices."
The AER has also warned Queensland electricity prices were likely to continue rising for two years.
Prices pressures also included the slowing of investment in new plants and "increasingly sharp highs and lows in demand".
Liberal National Party energy spokesman Pat Weir said the rebate was only a temporary fix and the government is still yet to release its 2030 energy plan.
"For months, I have been calling on the energy minister to act," he said in a statement.
"Queenslanders deserve to know what the minister's plan is to guarantee a secure, affordable and reliable energy supply."
Solar Citizens urged the government to speed up the transition of its energy generators from fossil fuel to renewables.
The energy advocacy group said more rooftop solar was needed and renewable energy should be made available to low income earners, renters and social housing residents.
"These power price rises come as households are also battling record prices at the fuel pump because of the spiralling cost of oil," Solar Citizens deputy director Stephanie Gray said.
"Now more than ever we need to be providing Australian families and businesses with affordable clean technology options so they can keep cost of living expenses under control."
Next week, the AER will set retail electricity prices for regional Queensland for 2022/23.
