The Queensland government has stepped in to slash an expected increase in regional electricity prices by more than half.
On Wednesday morning, the Queensland Competition Authority announced its final decision on regulated retail electricity prices for regional Queensland.
The annual bill for a typical customer on the main residential tariff was expected to increase by 7.1% while the typical customer on the main small business tariff was expected pay 8.2% more.
However Treasurer Curtis Pitt said the government would reduce the price hike by removing fees for the solar feed-in tariff from Queensland customers' bills.
Under the government's plan, the household bill in regional Queensland would increase by 3.3 per cent, with a saving of $51 a year compared with the previous expected price hike.
The small business increase would be 4.1 per cent, with a saving of $90.
QCA Chair Professor Roy Green said their earlier decision was based on network charges regulated by the Australian Energy Regulator and the latest information from competitive wholesale and retail electricity markets.
“We understand that affordability is an issue for a number of customers however, we are limited in our ability to consider issues of affordability under the legal framework for setting regulated prices,” Prof Green said.
"But they are on par with lower‐cost electricity prices in the south east of the state.”
Prof Green said the price rises were primarily due to substantial increases in wholesale energy costs, driven by a projected tightening in the demand–supply balance within the National Electricity Market.
“A number of factors have contributed to this tightening, including the increased demand from electricity‐intensive in‐field gas compression associated with the LNG export facilities, and the closure of Hazelwood power station in Victoria,” he said.
Local industry advocacy group MITEZ said the price rises proposed by QCA would push many companies closer to breaking point.
MITEZ President David Glasson said Australia could not value add to process, refine, smelt, pack and package because our input costs have become too high.
“Many producers (Glencore, Incitec Pivot, zinc refineries and meat processors) are cost takers and competitors have much cheaper input costs so local industries simply cannot pass on additional costs to their customers,” he said.
The QCA said residential customers experiencing difficulty paying their electricity bill should speak to their retailer, as all energy retailers are required by law to have programs to assist customers in financial hardship.
The QCA’s final report and accompanying documents are available at www.qca.org.au