Regulated Retail Electricity Prices 2014-15
Link to Media Release and Factsheets
On 11 December 2014, the QCA released its Draft Determination on regulated retail electricity prices for 2014-15. The QCA has continued to base prices on an N + R cost build-up approach where the N (network) component is treated as a pass-through and the R (energy and retail) component is determined by the QCA.
Cost-reflective notified prices will rise in 2014–15 due to increases in the underlying costs of supply. Energy generation costs are expected to increase by around 29% compared to 2013–14. This is driven by rising industrial demand associated with rapid development of the liquefied natural gas (LNG) export industry in Queensland and higher fuel prices (mainly gas).
The second major cost driver is the Queensland Government’s Solar Bonus Scheme. The scheme's costs have almost doubled since 2013-14 and will continue to push up prices in future years as distributors recoup costs incurred in paying feed-in tariffs to solar customers.
Increases in network costs (excluding costs related to the Solar Bonus Scheme) are the third major cost driver. Network revenue allowances are approved by the Australian Energy Regulator (AER). Network prices are also increasing because of lower than forecast consumption which means that network charges must increase to recover the allowed revenue.
Given the uncertainty over whether the carbon tax will be repealed, the QCA has also determined a set of retail prices excluding the carbon tax. If the carbon tax is repealed, these are the prices that we expect to apply.
We have set carbon-inclusive transitional prices using the same approach used for 2013-14. This results in price increases of between 13.2% and 19.5%. Given how far away these tariffs are from cost-reflectivity, if the carbon tax is repealed typical bills will increase by 10% to ensure that the gap between where these tariffs are and where they should be does not grow.
The Draft Determination, the draft report on energy purchase costs from the QCA’s consultant (ACIL Allen) and data files relating to the modelling of energy costs are below, along with fact sheets which help to explain the Draft Determination.
Submissions in response to the Draft Determination close on 28 February 2014.
Draft Decision Data
Customer fact sheets