Mark Bailey
May 31, 2016
Electricity prices will rise by an average 2.8 per cent for residential consumers and 11.2 per cent for small businesses on July 1.
The Queensland Competition Authority (QCA) today released its final determination on regulated retail electricity prices for regional Queensland in 2016-17.
The rises are higher than the QCA predicted in its draft determination in March.
At that time, it had forecast residential bills would only increase by 0.6 per cent while small businesses would face a 9.3 per cent rise.
Minister for Energy Mark Bailey said the final determination was proof the Palaszczuk Government’s efforts to restrain and stabilise power prices were working, but he acknowledged the forecast rises represented a change from the draft determination.
However, he emphasised the impact on individual customers will vary case by case depending on their consumption.
“While this change was unexpected, we respect the independent price setting process of the QCA,” Mr Bailey said.
“Part of the increase relates to increased demand for electricity in Queensland, which drives higher wholesale prices. However, the report revealed restrained network costs had held down the increase in electricity prices.
“This only happened because the Palaszczuk Government intervened last year, directing Energex and Ergon to not appeal the Australian Energy Regulator’s decision to curb network costs.
“That direction would not have been possible if our power assets had been sold off under the LNP.”
Mr Bailey also noted the fixed charge will reduce for the first time since the QCA started determining electricity prices nine years ago.
“This is good news for customers with low consumption, with almost one-third of regional retail customers receiving lower annual bills in 2016-17 compared to 2015-16.”
Mr Bailey said the government was proactively working with the business and agricultural sectors to help identify ways to manage electricity price impacts.
“This includes working with Ergon to improve information and accessibility of advice to help ensure these customers are on a tariff that best suits their needs – minimising their costs to the greatest extent possible,” he said.
“We are committed to ensuring that regional customers pay a similar price to those in south east Queensland.
“This year we will spend almost $500 million subsidising the cost of electricity in regional Queensland. That investment supports 700,000 regional Queensland customers.”
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Michael Hart
Mr Hart said the increase would be higher still for households utilising tariffs 31 and 33.
“Regional small businesses are facing double digit percentage increases in their power costs, which is a huge concern for them,” he said.
“The bill for a typical small business on the main Tariff 20 will go up by around $236, or 11.2 per cent.
“For those businesses on the seasonal time-of-use Tariff 22, the average bill will increase by $660, or 15.8 per cent.
“This price hike will hit hard, considering it comes at a time when many regional communities are struggling with declining levels of business confidence and high unemployment.”
Mr Hart said the QCA report showed network costs, the largest component of customers’ bills, was decreasing.
“Network costs make up half of the electricity bill, so when these costs are going down that’s a good thing,” he said.
“This reduction relates to the decisions taken by the LNP when in government to strip billions of dollars in expenditure out of state-owned electricity companies and to put an end to the gold plating of the networks.
“The increase in prices we are seeing today is primarily in relation to higher energy costs. Unfortunately, the only policies we’ve seen from the Palaszczuk Labor Government are going to drive these costs up further.
“The government is even refusing to release a report which contains recommendations on ways of driving down electricity prices for Queenslanders in the long term.
“This again shows the Labor Government is asleep at the wheel, and unfortunately it’s Queenslanders who are paying the price through higher power bills.”
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