Regulated retail electricity prices for regional Queensland in 2018–19

Regulated retail electricity prices for regional Queensland in 2018–19

28 Feb 2018

Electricity MEDIA RELEASE

The Queensland Competition Authority (QCA) has today released its draft determination on regulated retail electricity prices (notified prices) for regional Queensland in 2018–19.

QCA Chair Professor Roy Green said the review of notified prices began in December 2017 under a delegation from the Minister for Natural Resources, Mines and Energy, the Honourable Dr Anthony Lynham MP.

"This year's draft determination forecasts decreases across all tariffs, including the main residential and small business tariffs," Professor Green said.

"The primary contributor to the tariff decreases for 2018–19 is a decline in network costs. Wholesale energy costs have also decreased by smaller amounts, but these reductions have been largely offset by higher Renewable Energy Target (RET) and prudential costs."

"Overall, the draft forecasts show a 2.3 per cent decrease in the annual bill for a typical customer on the main residential tariff (tariff 11) and a 4.3 per cent decrease for the typical customer on the main small business tariff (tariff 20).

"The annual notified price for a typical customer on the main residential tariff is expected to decrease by $35 from $1,542 to $1,507. For the typical customer on the main small business tariff, the annual notified price is expected to decrease by $110 from $2,568 to $2,458.

"The draft determination is based on network charges regulated by the Australian Energy Regulator (AER), the latest information from competitive wholesale and retail electricity markets, and on expert analysis from the QCA's consultant (ACIL Allen)."

Professor Green said ACIL Allen had advised that its forecast reductions in wholesale energy costs are less than those recently forecast by some other entities, including the Australian Energy Market Commission (AEMC).

"This is because ACIL Allen forecasts wholesale energy costs using a model that assumes retailers actively hedge their retail load in advance, so as to account for fluctuations in the electricity wholesale spot price. This reduces price volatility, and is considered more reflective of the actual market behaviour of prudent retailers."

Professor Green noted that the 2018–19 notified prices now incorporate metering charges, following the National 'Power of Choice' reforms that came into effect on 1 December 2017.

“It is important to note we set prices in accordance with the Queensland Government's uniform tariff policy, which means most regional customers pay significantly less for electricity than it costs to supply.”

Professor Green also noted that this is a draft determination, and it is likely there will be changes in the final determination.

He said that consultation is an important part of the QCA's assessment processes, and he encouraged stakeholders to provide feedback on the draft determination.

"We strongly encourage stakeholders to review our draft determination and provide feedback through our submission process. We are giving stakeholders until 9 April 2018 to make a submission, which is a slightly longer period than in most recent years. Information on how to make a submission is available on our website."

"Depending on stakeholder interest, we plan to hold community workshops in mid-March in Bundaberg, Cairns, Cloncurry, Emerald, Mackay, Mount Isa, Rockhampton, Toowoomba, Townsville and Brisbane. Stakeholders can register their interest in attending a workshop through our website," he said.

The final determination will be published by 31 May 2018, with the notified prices to apply from 1 July 2018. The notified prices are only available to customers in regional Queensland.

All media enquiries: Cole Lawson Communications, 07 3221 2220 or 0437 922 496.

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