Regional Queenslanders are set to feel the most pressure on their power bills as the highest power price increase of almost 30 percent was announced.
The Queensland Competition Authority (QCA) released the final decision on regulated real electricity prices on June 9, with the price increase starting from July 1.
The households in regional Queensland will see an average increase of $429 (US$290) or 28.7 percent added to their annual power bill, taking the average annual household bill from $1,496 (US$1,008) to $1,926 (US$1,298).
Small business owners will also be impacted by the price increase, their annual average bill will increase by $511 (US$344) or 26.8 percent, taking it from $1,907 (US$1,285) to $2,418 (US$1,630).
Southeast Queenslanders will also face an increase to their annual power bill but only with an increase of 21.5 percent or $349 (US$235) per year.
The QCA release said the significant price increase is mainly due to an increase in wholesale energy costs from the National Electricity Market (NEM).
Retailers often adopt strategies like purchasing Australian Stock Exchange (ASX) contracts to hedge their risk to reduce their exposure to the changing prices in the NEM, which allows retailers to lock in a price for electricity that they will deliver to consumers at a later date.
“Our wholesale energy cost estimates reflect a significant increase in ASX contract prices, driven by market expectations of higher spot prices and greater price volatility,” QCA Chair Flavio Menezes said.
“This is likely due to higher coal and gas prices, which have been impacted by the war in Ukraine, as well as uncertainty around the availability and reliability of coal-fired power plants, which impacts the supply–demand balance in the Queensland region.”
QCA added that the availability and reliability of the Kogan Creek and Callide C coal-fired power stations have contributed to the price increase, after uncertainty with major outages and delays in returning their service.
“These events have placed upward pressure on wholesale energy prices and are important determinants of Queensland retailers’ energy costs and of the wholesale cost of energy in the NEM more broadly,” the report (pdf) read.
Impact of Explosion at Power Plant
Callide C is a coal-fired power plant located in central Queensland that was forced to go offline following a series of malfunctions in the facility. The entire power station comprises of two power plants Callide B and C, each with two generating units.
On May 25, 2021, an incident caused Unit C4 to explode, causing substantial damage to the unit and power outages for hundreds of Queensland homes.
Queensland state-owned CS Energy who owns Callide C in a 50/50 joint venture with Genuity announced on May 30 that the damaged Unit C4 is still in the recovery state.
After pushing the return to service date back multiple times, the Callide C return of service is now delayed until May 2024, and won’t be able to run at full capacity until July 2024. The C3 unit is expected to partly return in early January 2024, but won’t be fully operational until February.
However, shadow treasurer David Janetzki said the report clearly shows that the “Palaszczuk government’s failure to properly maintain energy assets has driven up electricity prices for Queenslanders,” and is a “bitter blow” to Queenslanders who are already dealing with the “biggest cost-of-living pressures in the nation.”
“Minister de Brenni said multiple times the failures at Callide would have no impact on Queenslanders’ power prices,” Janetzki said in a release.
“Minister de Brenni told Queenslanders the failure at Callide wouldn’t impact power prices, yet their bills are going through the roof again,” shadow energy minister Pat Weir said.
Rebate Relief for Vulnerable
The Queensland government introduced a new energy bill rebate with the Australian government on May 15 for the 2023-24 financial year under the Energy Bill Relief Fund.
Vulnerable households will receive a $500 (US$337) energy bill rebate, and Queensland small businesses will receive a $650 (US$438) energy bill rebate. Eligible households include existing Queensland Electricity Rebate recipients and holders of a pensioner concession card, health care card, Department of Veterans’ Affairs (DVA) gold card, or senior health card.
Queensland’s state energy minister Mick de Brenni said the government is always looking to put pressure down on electricity prices and would deliver a bigger cost of living rebate in the next budget, without mention of looking to lower energy prices.
“We are also working with the Australian government to deliver $500 in bill relief to more than one million vulnerable Queensland households,” he said in a statement.
The Power Together coalition is an alliance of organisations, such as the Queensland Council of Social Service (QCOSS) and the Queensland Conservation Council (QCC), who advocate for the state government to act on their eight-point plan to address the increasing pressures on the cost of living.
Some points from Power Together’s plan are to install solar panels on public housing, offer electricity rebates, and to introduce stronger minimum energy efficiency standards for rental properties; which will help Queenslanders who rent and cannot control their own energy bills.
Environmental group QCC’s director Dave Copeman said on June 9 in a media release that bipartisan support is needed for the Energy Bill from the Liberal National Party of Queensland, and communities will be a risk from “climate change and uncoordinated development if we don’t have the LNP support for the Bill.”
“Queensland power prices and climate emissions will drop when renewables are built and coal is closed.
“The pressure on global energy prices from the war in Ukraine may be out of our hands but the Queensland government has the responsibility and solutions that can help put the brakes on soaring local energy bills,” Copeman said.
Price Increases Across the Nation
Price increases were also announced for New South Wales, Victoria, and South Australia in May, but they did not exceed the rise placed on regional Queensland.
The Australia Energy Regulator confirmed in the Default Market Offer Prices 2023-24 (pdf) that electricity prices will increase between 19 and 25 percent from July 1.
However, Victoria’s Energy Services Commission announced on May 25 its annual increase would be a 25 percent default offer.
Since the Victoria state government launched a $250 (US$168) Power Saving Bonus scheme on July 1, 2022, it has since had more than 1.8 million households receive their $250 payment by comparing their energy bills online.
