Power price stability key focus of response to QPC report

More than 150,000 additional Queensland families will receive a rebate on their electricity bills, while concessions for pensioner, veterans and seniors’ card holders and the Solar Bonus Scheme will be retained.

Premier Annastacia Palaszczuk said these measures, in response to recommendations from the Queensland Productivity Commission’s Electricity Pricing Inquiry Final Report, will stabilise electricity prices.

The Premier said the Queensland Government’s response to the QPC Report was another step in delivering price stability to electricity consumers following the 43 per cent increase in power bills under the Nicholls-Newman government.

Key elements in the government’s response to the QPC Report include:

• providing additional funding starting at $48 million per annum (or $170.1 million to 2019-20) to extend the electricity rebate to Commonwealth Health Care Card Holders so that an additional 157,000 low-income Queensland families are better supported. From 1 January 2017, low-income households and families will become eligible to receive around $330 a year to help pay their energy bills;
• retaining the electricity rebate for holders of a Pensioner Concession Card, Veteran Affairs Gold Card or a Queensland Seniors Card;
• supporting regional business customers by providing $10 million over two years to deliver improved access to digital metering, greater information about tariff options and co-contributions to help customers invest in operation and equipment changes to manage bill impacts;
• maintaining our commitment to building the uptake of renewable energy in Queensland; and
• identifying improvements to the governance arrangements for the government’s energy businesses to strengthen shareholder oversight.

 “My Government has already taken firm action to stabilise electricity prices,” Ms Palaszczuk said.

 The Government’s issued a directive to distributors Energex and Ergon Energy not to challenge an Australian Energy Regulator decision on network revenues. A challenge that would have seen bills increase if it had been successful.

“Due to this action, under the first two years of the government the average annual electricity price increase for households will be just 1.2 per cent,” the Premier said.

“This compares to an increase of 43 per cent over the term of the Nicholls-Newman Government. For small businesses, the average annual increase is just 3.8 per cent, compared with an increase of 21.9 per cent over the term of the previous LNP Government. This is proof that the Government’s efforts to restrain and stabilise electricity prices are working,” Ms Palaszczuk said.

Treasurer Curtis Pitt said the Palaszczuk Government had carefully considered the QPC’s Final Report and was meeting its obligation to respond within six months of the report’s delivery.

“We deliberately set wide-ranging terms of reference for the Inquiry so that all options to put downward pressure on prices could be considered,” Mr Pitt said.

“Issues that we asked the QPC to consider included the competitive electricity market, productivity growth, efficiency and reliability, environmental outcomes, vulnerable customers and responsible management of the state’s finances.”

Mr Pitt highlighted a $10 million assistance package over two years to support business customers in regional Queensland, including farmers and irrigators, as well as energy-intensive businesses such as traditional manufacturing.

He said the package would provide a range of measures to support regional businesses, including better access to digital metering and more information on tariff options and bill impacts to help customers reduce their electricity costs.

Mr Pitt said funding of $48 million a year, representing a funding increase of $170.1 million over the forward estimates to 2019-20, had been allocated to fund the government’s response initiatives.

Energy Minister Mark Bailey also welcomed the QPC report and said the government had also accepted a recommendation to reform the Queensland energy concessions framework to improve support to vulnerable customers.

“These changes will provide support to an additional 157,000 low-income families, bringing the total number of households assisted in Queensland to approximately 688,000 in 2016-17,” Mr Bailey said.

“Commonwealth Health Care Card holders and asylum seekers will be eligible to receive the electricity rebate.

“They can apply to their retailer for the rebate from 1 April 2017, with payments back-dated to 1 January 2017.”

Mr Bailey said the government’s decision not to accept a small number of the recommendations was supported by a sound policy rationale based on strategic goals and the need to remain flexible and responsive to emerging sectoral challenges in the future.

“In particular, the government does not accept recommendations concerning generator rebidding behaviour in the wholesale electricity market, has ruled out early closure of the Solar Bonus Scheme, and will not remove access to electricity concessions for Queensland Seniors Card holders,” he said.

Mr Bailey said a number of recommendations will require further consideration by government, including those relating to the Community Service Obligation (CSO) and competition in regional Queensland.

A government response to the QPC’s report on Solar Feed-In Pricing is due shortly.

Contact:

Treasurer’s Office 0447 316 432 / 0419 945 546