Pollies hooked on power

Profits from electricity bills flow into state coffers

MORE than a quarter of the average household power bill is going to the Queensland Government in profits on state-owned networks charges.

Analysis by electricity sector consultant Hugh Grant says that the profit margin on charges by monopolies Energex, Ergon and Powerlink over the past three years have averaged 47 per cent.

While successive governments have lauded their efforts to reign in power costs, Mr Grant says they have been complicit “in enabling the Queensland networks to exploit consumers in their pursuit of excessive profits”.

It has delivered a windfall of more than $5 billion to the Palaszczuk Government in the past three financial years.

Mr Grant, a former member of the Australian Energy Regulator’s consumer challenge panel, has previously highlighted that the returns dwarfed those achieved by some of the nation’s most successful companies including Woolworths, BHP and Telstra.

He said the research paper demonstrated “the irresponsibility of continuing to allow Queensland’s state Budget to be so heavily reliant upon the extraction of sustainable profits from monopoly electricity networks’’.

Chamber of Commerce and Industry Queensland advocacy general manager Kate Whittle said: “It is now clear to the public what we have always known; that state-owned operators have presided over an extraordinary price-gouging exercise of households and businesses.”

But Energy Minister Anthony Lynham said the dividends from publicly owned energy businesses were reinvested into infrastructure and helping to lower energy costs through pensioner concessions and initiatives including a $50 annual rebate on household electricity bills, rebates for energy-efficient appliances and capping prices rises to inflation for two years.

“Queensland continues to have the lowest wholesale prices on the east coast,” the minister said.

Mr Grant argued the transfer of networks’ revenue regulation to a national framework in 2006 had proven to be a “catastrophic failure’’ for customers, with network prices more than doubling.

His report recommends the Government direct the networks to set revenues below the maximum cap as NSW recently did, reducing prices 34 per cent.

It also calls for regulation to be returned to the Queensland Government from the national framework and governance improvements to strengthen its oversight of the networks.

Allan Dingle of Canegrowers, which commissioned the report, said: “This cash cow mentality is threatening the long-term viability of industries like irrigated agriculture, with flow-on impacts in regional Queensland.”