Many residential and small business customers in regional Queensland should enjoy a small drop in power prices following the release on Friday of the Queensland Competition Authority’s latest determination.
Typical residential customers in regional Queensland will see a 4.4 per cent drop in their annual electricity costs, or around $62 off their annual bill.
For a typical customer on the main residential tariff (Tariff 11), this means a bill of $1336 instead of $1398.
Typical small business customers should see a crop of 5.8 per cent or around $144 off their annual bill.
For a typical small business customer on the main flat rate tariff (Tariff 20), this means a bill of $2347 instead of $2491.
QCA chair Prof Flavio Menezes said the main reason for the savings was the drop in the energy cost component of notified prices.
“We are expecting a big surge in renewable energy entering the National Electricity Market in 2019–20. This expectation has caused our overall estimate of energy costs to drop by approximately 10 per cent,” he said.
“It is important to remember the QCA sets prices for regional Queensland in light of government policy.
“Because of this, electricity prices in regional Queensland are essentially the same as the price consumers pay in south-east Queensland. So the difference in the cost (of supplying people in regional Queensland) is met by the government.”
Prof Menezes also warned there were a number of customers whose transitional tariffs would expire soon, with most set to do so by June 2020.
“I strongly encourage customers whose transitional tariffs are set to expire, particularly those who have not yet made inquiries, to gather information and make further inquiries on what option is best for them,” he said.
Premier Annastacia Palaszczuk welcomed the fall in regional power prices.
She said it was the second year in a row the independent QCA had recommended a price cut.
“Bills fell this year and will fall again from July 1, meaning all up over two years a typical small business will have saved $230 and a typical household, $82,” the Premier said.
“I know it will be welcome news, because every dollar counts when it comes to the cost of living.”
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However, the QCA has also cut the mandatory solar feed-in tariff for customers in regional Queensland for 2019-20 from 9.369 cents per kilowatt hour (c/kWh) to 7.842 cents c/kWh.
“This rate is lower than last year’s feed-in tariff, primarily due to a reduction in wholesale energy costs,” he said.
Prof Menezes said this would still give customers with solar panels a fair and reasonable return for the electricity they export to the grid.
“This reduction is mainly driven by the expected entry of approximately 5200MW of solar and wind generation into the National Electricity Market,” he said.
“Another factor that explains the reduction . . . is the Queensland Government’s directive to establish CleanCo, which is expected to place downward pressure on peak prices.”
Customers who receive the 44 c/kWh feed-in tariff under the Solar Bonus Scheme will not be affected by the new tariff. They will stay on the same feed-in tariff until 2028 as long as they maintain their eligibility.
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In other energy news:
David Smales has resigned as chief executive officer of Energy Queensland.
Energy Minister Dr Anthony Lynham said Mr Smales had resigned due to travel required to the United Kingdom to support his family.
“I join the Energy Queensland Board in thanking Mr Smales for his leadership and stewardship delivering the merger for Energy Queensland as Chief Executive of Australia’s largest electricity distribution business with related retail and energy services businesses,” Dr Lynham said.
Recruitment of a new chief executive will begin soon.
