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    Minister for Energy and Water Supply
    The Honourable Mark McArdle

    Cautious okay for national electricity rule changes

    Minister for Energy and Water Supply
    The Honourable Mark McArdle

    Friday, August 24, 2012

    Cautious okay for national electricity rule changes

    The Australian Energy Market Commission’s (AEMC) draft new rules, released yesterday, highlight Federal Labor’s failure to act over the Bligh Labor Government’s skyrocketing electricity network charges.

    Energy and Water Supply Minister Mark McArdle acknowledged the long overdue changes but said his department still needed to provide a more detailed assessment of the true impact of suggested changes.

    Mr McArdle said the Australian Energy Regulator (AER) had overseen the explosion in construction of poles and wires and a proper review of the entire process is required – not just tinkering around the edges.

    “Most people would rightly question why it took the Gillard Labor Government so long to realise massive electricity price increases were hurting struggling families and businesses,” Mr McArdle said.

    Mr McArdle said that, unlike Federal and State Labor Governments, the Newman Government took real action by moving quickly to reduce the ongoing price impact to Queensland households by freezing the standard residential electricity tariff (Tariff 11) at 2011-12 prices.

    “The Rudd-Gillard Labor Government was elected in 2007. During this time household electricity prices in Queensland have increased by about 83 per cent. The Federal Labor Government signed off on this extra pain for struggling households every year for the last five years,” he said.

    “This year, the only increase for Queensland household electricity bills on Tariff 11 should be a result of Julia Gillard’s Carbon Tax.”

    Mr McArdle said the proposition of allowing the national regulator to benchmark electricity network business efficiencies, including the requirement to publish annual reports, would enhance transparency in its assessment processes and increase the rigour around efficiency in these businesses.

    Similarly, having the regulator review the efficiency of past capital expenditure is also important.

    Mr McArdle said “gold plating” in electricity networks occurred for many years, resulting in billions of dollars spent over-capitalising the electricity network.

    “Where was the Gillard/Rudd Government during this period?” he asked.

    Mr McArdle said he was concerned that while the AEMC was willing to address the cost of increasing network charges, it remained silent about the cost increases of ‘green schemes’ driving up electricity costs at the same rate.

    “Some of the AEMC claims are blatantly untrue. Green schemes, including the Carbon Tax, are currently the largest electricity cost drivers,” he said.

    “Network companies have been required to spend extra capital to support rooftop solar schemes, promoted by Labor and their Green allies, and these costs are borne by electricity network companies.

    “If the Federal Government is sincere about reducing electricity prices then the real costs of ‘green’ policies should be transparent, so consumers can see what is driving up prices.”

    [ENDS] 24 August 2012

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