Uniform Electricity Tariff Policy
Regional Queensland currently suffers unsustainable electricity costs which are detrimentally affecting the viability of regional industries and small to medium enterprise businesses (SME), as well as increasing cost of living pressures on urban/domestic consumers. Another 10% increase is proposed for 2016-2017 with residential retail prices also tipped to rise again. High and increasing electricity prices will further jeopardise industry growth opportunities across the region and be contrary to Queensland and Federal Government efforts to increase jobs and growth across the region.
The aim of the Uniform Tariff Policy (UTP) is to provide that wherever possible, customers of the same class should pay no more for their electricity, regardless of their geographic location in Queensland. This is premised on the understanding that the UTP will deliver electricity as an essential service, on a fair basis, regardless of location and to encourage economic development in regional Queensland.
The Queensland Government has provided annual funding of approximately $650m as a Community Service Obligation (CSO) payment to Ergon Energy (Energy Queensland) for regional Queensland domestic and small to medium business users, giving effect to the UTP.
The Queensland Productivity Commission Electricity Pricing Inquiry recommended that the CSO be paid to the network provider, to enable retail competition in the regions. Changes to the way in which the CSO is paid could significantly affect the affordability of electricity in the regions. In maintaining the UTP, the Queensland Government needs to ensure that no regional household or business will be worse off.
The UTP needs to be maintained to deliver equitable electricity pricing into the future. The way it is paid through the CSO must continue to ensure equity for regional electricity consumers.
Additionally a 5% headroom charge introduced in 2013 to allow competition in the south-east, is applied statewide regardless of the fact that there is only one provider in regional Queensland.
In maintaining its commitment to the UTP and annual payment of the CSO, consideration of any changes, including moving to a network CSO by the Queensland Government must:
- ensure that no regional household or business is worse off, and be informed by effective engagement with regional residential and business consumers, industry and communities; and
- ensure the Queensland Government removes the 5% headroom requirement in areas where there is no electricity supplier competition.
Kevin Byrne, CEO, Advance Cairns
Ph: 07 4080 2900
|PROPONENTS:||Advance Cairns, RDA FNQ&TS, FNQROC|
|STATE ELECTORATES:||All TNQ|
|FEDERAL ELECTORATES:||Leichhardt, Kennedy|