April 12, 2016
The proposed power price rises released recently have shocked many agricultural consumers, according to the Queensland Dairyfarmers Organisation.
In its weekly update to farmers, the QDO said the annual power bill for an average dairy shed consuming 60,000 kWh per annum on Tariff 62 would increase by about $1280.
The Queensland Competition Authority (QCA) released its draft determination on regulated electricity prices in March.
The QDO said the draft determination would affect consumers in the Ergon distribution area, directly contradicting comments by the Premier and the Energy Minister last year that Queenslanders would see price stability.
The QCA has blamed the increase on the cost of Renewable Energy Certificates and a tightening supply/demand situation.
“Apparently this means now that LNG export has ramped up, there has been an increase in demand for electricity to compress gas for offshore movement,” the QDO statement said.
“If so this is something that should have been easily foreseen by government and regulators and not constitute a surprise to them now.
“What is clear is that increased electricity prices have nothing to do with power generation cost as the coal price is similar to 2007 levels and renewable sources are also competitive, even considering the fact that they only account for a small part of Queenslanders’ overall power bill.
“The power cost increase revolves around inefficient transmission costs combined with the dividend paid back to government on what are clearly over-valued power assets.
“This has meant that the average dairy farmer’s power bill has gone up by around 110pc since 2007.”
The QDO said it had been working with Queensland Farmers’ Federation to raise awareness of the impacts the “internationally uncompetitive electricity prices” were having on industries’ profitability and productivity.
“Clearly the electricity industry needs a complete review and overhaul if we are to achieve internationally competitive prices,” the QDO said.
“QDO and QFF are aware that farmers are increasingly questioning whether they can afford to depend on grid connection in the future.”
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