The Power Smile Fades Fast

While Energy Minister Anthony Lynham was busy crowing yesterday over the Queensland Competition Authority (QCA) draft determination of 2018-19 electricity prices for regional Queensland it seems he forgot to mention a large slab of farmers.

electricity-price-riseThe Draft released yesterday shows the anticipated price falls will not be applied to Queensland farmers operating on what QCA describe as “transitional or obsolete” tariffs.

QFF President Stuart Armitage says that’s a move that “shafts” the state’s farmers.

“The Queensland Competition Authority (QCA) decision not to pass on network electricity price savings to farmers and other businesses on transitional and obsolete tariffs is a betrayal of rural and regional communities.”

“While the price drop for regional households and some small business is good news, is does nothing to relieve Queensland’s highly productive intensive farming businesses.”

The QCA claims that those specific tariffs for some small businesses and irrigators are not cost-reflective and therefore ineligible to receive the small price relief.

“It is disappointing that despite QCA acknowledging that Ergon’s network charges and generation costs are declining, this would not be passed onto farmers on irrigation tariffs.”

Mr Armitage says that’s just unproven nonsense on the part of the authority.

“It must be demonstrated how these tariffs are not cost-reflective, reasoning like ‘network congestion’ has been proven not to be true.”

According to Queensland Productivity Commission data, there are around 35,000 customers in regional Queensland on tariffs classified as transitional or obsolete. More than 35 % of them face bill increases in excess of 50 per cent when they are forced on to standard tariffs mid-2020.

“Irrigation electricity tariffs in Queensland have risen a minimum of 136% over the past decade, and for some more than 200%, while CPI has increased by just 24% over the same period.”

“The number of irrigating farm businesses in Queensland has fallen by more than 42% since 2009-10 to just 5,416 in 2015-16. A major contributor to this decline has been the cost of electricity.”

“Government must act to deliver price relief now and offer suitable tariffs for the future or broader consequences like exports and local supply will be impacted.”