Palaszczuk Government acting on electricity prices

Treasurer and Acting Energy Minister Curtis Pitt has reaffirmed the Palaszczuk Government’s commitment to putting downward pressure on electricity prices at today’s Estimates hearing in Brisbane.

Mr Pitt said action under the Powering Queensland Plan (PQP) - a $1.16 billion strategy to stabilise electricity costs, deliver jobs and investment and lead the transition to a clean energy sector - had this week been applauded by the ACCC.

“We welcome the national ACCC inquiry into electricity prices which held its first public hearing in Brisbane this week – this is action the Federal Government should have taken a long time ago,” Mr Pitt said.

“The National Electricity Market (NEM) is broken due to energy policy paralysis at the federal level preventing much-needed investment in new generation, driving up wholesale prices and putting energy security at risk. It’s not delivering for households, business, industry or governments.

“Despite this, the Palaszczuk Government is doing the heavy lifting and using the levers we have available because we’ve kept our energy assets in public hands.”

Mr Pitt said in response to NEM volatility and the associated higher electricity prices, the Palaszczuk Government acted swiftly under the Powering Queensland Plan with a major $770 million cost of living investment to slash the expected QCA electricity price increase by more than half.

“To shield Queensland consumers from high electricity price rises being felt across the country, the Palaszczuk Government directed Energy Queensland to remove the costs of the Solar Bonus Scheme from network charges until at least 2020,” Mr Pitt said.

“This means we have the lowest retail price increase of all mainland States – 3.3% compared to around 10-20 per cent in other states and also means over the term of our government average prices for households have increased an average of just 1.9% per year compared to 43% over the term of the LNP government.

• 19.9% in South Australia
• 19% in ACT
• 11.5% in New South Wales
• 9.6% in Victoria
• 3.3% in Queensland

This was welcomed by ACCC Chairman Rod Simms this week: “… the good news is, the Queensland Government, alone of any government, has drawn on its own budget to remove that cost to consumers and I certainly applaud them for doing that and again I think it’s evidence of a welcome focus on affordability…” (ABC Brisbane 25/7/17)

Mr Pitt said further actions under the PQP aimed to reduce wholesale prices including restarting Stanwell Corporation’s 385 megawatt Swanbank E gas-fired power station which was mothballed by the previous LNP government and also directing Stanwell to undertake strategies to place downward pressure on wholesale prices.

“… the Energy Minister here in response to the price spikes in the first few months of this year, instructed Stanwell to moderate its bidding behaviour, they did and prices fell immediately…. that was obviously a welcome move by the Queensland Government…” (Rod Simms, ACCC Chair ABC Brisbane 25/07/17)

“Since the Palaszczuk Government launched our PQP forward wholesale contract prices for 2018 have fallen by more than 16%,” Mr Pitt said.

“Between March-May this year, Qld had the lowest wholesale prices of any state, and we remain the lowest.

“Due to the broken state of the NEM, wholesale electricity prices have increased across the board but much more in every other state between 2014-15 and 2016-17 than Queensland which includes 177% in South Australia, 131% in New South Wales, 119% in Victoria, 103% in Tasmania and 77% in Queensland.

“In fact, when Tim Nicholls was Campbell Newman's Treasurer, wholesale electricity price increases in Queensland were higher and were the highest in the nation by a huge margin - 81% between 2011-12 and 2014-15 – a period when wholesale prices in other mainland NEM states increased by only 11%-30%.”

Mr Pitt said network costs form a larger part of a typical household electricity bill than wholesale costs, and the Palaszczuk Government’s direction to Energex and Ergon not to appeal the Australian Energy Regulator’s (AER) decision has helped stabilise electricity prices.

“The New South Wales Government challenged the AER’s most recent decision, along with the ACT, and that meant ACT and New South Wales consumers are paying $3 billion more for electricity then they otherwise would be.  The Queensland Government chose not to appeal… I give credit to the Queensland Government for deciding not to appeal.” (Rod Simms, ACCC Chair ABC Brisbane 25/07/17)

Mr Pitt said under the PQP the Palaszczuk Government would also be investigating the potential establishment of ‘CleanCo’ and that he would be writing to the ACCC Chair to confirm this.

The PQP also reaffirms the Government’s commitment to a 50 per cent target by 2030, which we’re transitioning to in a responsible, affordable and sustainable way.

“The Palaszczuk Government is 100% committed to continuing to use public ownership to back consumers, and to adopting the cheapest and most efficient forms of energy generation to lower power bills,” he said.

Powering Queensland Plan - https://www.dews.qld.gov.au/electricity/powering-queensland-plan

Media contact: Zoe Russell - 0428 079 640