Profits’ shocking toll

QUEENSLAND’S state- owned power stations raked in a staggering $ 500 million windfall because of record prices that are badly hurting households.

Publicly owned generators made an extra $ 1.2 billion income last financial year, while their expenses were also up about $ 600 million due to unprecedented demand.

Profits for the energy sector have increased significantly, due to increased demand for energy and record highs in market energy price.

Nearly $ 500 of the average $ 1750 yearly household power bill was going to profits of electricity networks and generators.

Those extraordinary profits are particularly galling for Queensland consumers, as the Queensland Government has no actual equity invested in the networks. The Queensland Government has extracted much more equity from the networks than it has ever put in.

Meanwhile irrigators, such as cane growers are spending tens of thousands of dollars, with some heading close to $ 100,000 per year in their family farming business electricity costs.

With the annual review of regional electricity prices now underway, Canegrowers is urging the Queensland Competition Authority to stop a bad situation becoming worse for regional businesses and households.

As well as hurting households, high prices have a significant impact on the cost of production across Queensland’s agricultural sector – a sector that is feeding Australians and earns important export revenue for the nation.

Among the flaws in the pricesetting structure highlighted by Canegrowers is the practice of applying Energex’s southeast Queensland network costs to the Ergon system.

Many of these costs just do not apply in the regional areas in which Ergon operates.

Ludicrously, competition costs are also built into the Ergon pricing structure but, unlike in the southeast, Ergon faces no electricity supply competition.

The Australian Competition and Consumer Commission has expressed concern about the impact of excessive retail costs and margins on electricity prices and is due to report to government in June.

The longer it takes to resolve these issues of inequity, the more windfall revenue Ergon makes straight from the households and businesses of regional Queensland.

Our objective is to ensure electricity prices are set in a way that provides performance incentives for all in the electricity supply chain to efficiently and effectively deliver electricity to all customers.

That is not happening now – if the system were efficient and effective, prices would be lower.

KERRY LATTER, CEO, Canegrowers Mackay