POWER SCOURGE

Con­sumers burned by govt hikes

Townsville Bulletin - - FRONT PAGE - TONY RAGGATT

FED­ERAL En­ergy Min­is­ter Josh Fry­den­berg has ac­cused the La­bor State Gov­ern­ment of hik­ing elec­tric­ity prices at the ex­pense of con­sumers to boost rev­enue.

State En­ergy Min­is­ter Mark Bailey in­sists gov­ern­ment- owned gen­er­a­tors are not to blame and says the at­tacks are “purely po­lit­i­cal”.

Mr Fry­den­berg’s data shows Queens­land had the high­est vol­ume weighted av­er­age whole­sale power price this year of $ 157.18/ MWh – about 30 per cent above the av­er­age.

FED­ERAL En­ergy Min­is­ter Josh Fry­den­berg has ac­cused the La­bor State Gov­ern­ment of hik­ing elec­tric­ity prices at the ex­pense of con­sumers to boost rev­enue.

But State En­ergy Min­is­ter Mark Bailey yes­ter­day de­nied Queens­land’s gov­ern­men­towned gen­er­a­tors were to blame and says the at­tacks were “purely po­lit­i­cal”.

Mr Fry­den­berg ( pic­tured) has re­leased anal­y­sis show­ing Queens­land had the high­est vol­ume weighted av­er­age whole­sale price in the Na­tional Elec­tric­ity Mar­ket so far this year of $ 157.18/ MWh – about 30 per cent above the av­er­age.

This is de­spite Queens­land hav­ing the coun­try’s most modern fleet of gen­er­a­tors, 65 per cent owned by gov­ern­ment.

The Queens­land Gov­ern­ment’s 2017- 18 Bud­get pa­pers show it ex­pects to reap $ 1.5 bil­lion in div­i­dends from gov­ern­ment- owned gen­er­a­tors in the next four years com­pared with es­ti­mates of $ 726 mil­lion over four years from 2015- 16 – a 110 per cent in­crease.

Mr Fry­den­berg ac­cused La­bor of push­ing gen­er­a­tors to “game the mar­ket” with “late re­bid­ding”. The whole­sale price is set by five-minute bids over 30minute trad­ing pe­ri­ods with gen­er­a­tors bid­ding low in the first four or five in­ter­vals and then re­bid­ding ca­pac­ity in the fifth or sixth in­ter­vals at much higher prices. Ac­cord­ing to Mr Fry­den­berg’s anal­y­sis, gov­ern­men­towned gen­er­a­tor Stan­well en­gaged in “eco­nomic with­drawal” by pric­ing some ca­pac­ity at $ 14,000/ MWh – the high­est al­low­able price. “The win­ner has been the La­bor Gov­ern­ment’s cof­fers; the loser, Queens­land con sumers,” Mr Fry den­berg said. He said a di­rec­tion by the State Gov­ern­ment last month to gov­ern­ment -owned gen­er­a­tor Stan­well led to sud­den fall in con­tract prices.

“The fact the for­ward price curve for elec­tric­ity has come down by 25 per cent since that di­rec­tion is an in­di­ca­tion of just how dam­ag­ing the un­com­pet­i­tive be­hav­iour has been,” Mr Fry­den­berg said.

Mr Bailey said the na­tional elec­tric­ity mar­ket was bro­ken but de­nied bid­ding prac­tices by Queens­land gen­er­a­tors were to blame even though ad­mit­ting his di­rec­tion to Stan­well al­tered bid­ding strate­gies to “fur­ther back con­sumers”.

This was de­spite the Aus­tralian En­ergy Reg­u­la­tor find­ing in its 2017 State of the En­ergy Mar­ket re­port that “op­por­tunis­tic bid­ding by large gen­er­a­tors has caused pe­ri­ods of spot mar­ket volatil­ity in Queens­land for sev­eral years, typ­i­cally dur­ing sum­mer”.

In­stead, Mr Bailey said the AER had blamed high price events this year on high elec­tric­ity de­mand and heat- re- a lated net­work and gen­er­a­tion con­straints.

“Queens­land is an en­ergy pow­er­house, one of the most ef­fi­cient and sta­ble in the na­tion with one of the low­est price in­creases this year in the na­tion so any at­tacks against Queens­land by the fed­eral en­ergy min­is­ter or ( LNP Leader) Tim Ni­cholls are purely po­lit­i­cal,” Mr Bailey said.

“Be­cause the Palaszczuk Gov­ern­ment has re­tained our en­ergy as­sets in public hands we were able to di­rect Stan­well to bring Swan­bank E back on­line af­ter it was moth­balled by the LNP and al­ter its bid­ding strate­gies to fur­ther back con­sumers, un­der our Pow­er­ing Queens­land Plan.”

Mr Ni­cholls said Mr Fry­den­berg’s anal­y­sis showed the La­bor Gov­ern­ment was gam­ing the mar­ket. Mr Ni­cholls said the Gov­ern­ment was us­ing elec­tric­ity as a “hid­den tax” on in­dus­try “to make more money to put in the cof­fers”.

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