Power prices in Queensland have been rising so quickly that the electricity bill for many households is now bigger than the rates bill.And the situation will just keep getting worse,with predictions of another 10% rise from July next year.That would mean a "50% increase in electricity prices in four years".
Or to put it another way,a $700 increase in an average household's energy costs since the State Government deregulated the electricity market back in July 2007. In an unfortunate piece of bluster in late 2005,then premier Peter Beattie declared that "we can guarantee that no one will pay any more" under the new scheme.
That was never going to be the case.The best we could hope for was that healthy competition between electricity retailers would keep prices as low as possible,not lower than they had been.In any event,the Government has been on the back foot ever since,trying to avoid the political heat from disenchanted voters who might feel it is the Governments fault that their power bills are going through the roof.
To some "large" extent,it is the Governments fault.In the power sector,as in so many other areas of essential service,from roads and water to hospitals,the Government dropped the ball for many years and jumped into action "only" when faced with 2004's damning Somerville report into Queensland's rickety electricity system.
It responded by committing about $9 billion over five years to urgently upgrade the state's transmission and distribution networks.A more measured approach over a longer period may well have cost substantially less. The enormous price increases we are currently exper- iencing are the cost of that massive and last minute spending spree,which is not about to stop.
The state's energy distribution companies,Energex and Ergon,have recently sought approval from the Australian Energy Regulator for more than $12 billion of new capital works spending over he next five years,which by Energex's calculations translates to about a "30%" increase in retail electricity prices between "2010 and 2015".
They swear this new round of spending is essential to ensure supply in the face of ever-growing demand.It will be up to the regulator to test this proposition.For the State Government's part,it needs to be completely honest with the people of Queensland.One certainty of life is that power prices will continue to rise and not just because of the enormous costs involved in delivering energy to a growing population.
Within a couple of years we are also scheduled to start paying for carbon as part of the Federal Government's greenhouse gas emissions reduction scheme.Growing re- newable energy use will also put upward pressure on costs.
Perhaps the Government should spend less time beating up the energy retailers-who are the ones whose names appear on our bills,even though they make up barely 10% of the overall cost- and more time working out how to control costs within its Government-owned power generators and distributors.[end]
Victoria now Queensland and soon the rest of the states will join this debacle all inspired by the institution of inadequate Governments.
With the above, in all probability adding 50% to the power bills of Queenslanders by 2013,it seems that Cougars timing was perfect.
HM.
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