Time for honesty on energy prices.Power prices in Queensland...

Time for honesty on energy prices.

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.