Peak farming group, Canegrowers has slammed the State Government over its handling of a draft determination by the Queensland Competition Authority (QCA) for another costly increase in electricity prices.
The QCA draft determination, Regulated Retail Electricity Prices for 2016–17, recently proposed increasing electricity prices for irrigation tariffs by a further 10.3 per cent.
Stakeholders are being urged to review the proposal and provide feedback before April 20 through the QCA website (www.qca.org.au).
Canegrowers CEO Dan Galligan says the proposal comes on the back of power price increases of up to 96 per cent over the past seven years which he says are crippling farmers across multiple industries.
“There is a lot of buck-passing – everyone involved is ducking for cover and saying it is somebody else’s problem – we need to get all the players together to discuss some simple but workable solutions,” Mr Gailligan said.
“To take the enormous pressure off the end users – Queensland farmers, businesses, householders - in the meantime, and to put pressure on a solution being found as quickly as possible, the State Government needs to take some leadership and call an immediate end to any further increases.”
Canegrowers say the proposed hikes are neither cost reflective nor efficient, and are encouraging peak load demand and discouraging network use at other times.
Mr Galligan said the proposal is also undermining the international competitiveness of irrigated agricultural industries across Queensland.
“For agriculture and irrigators, this is a particularly devastating outcome as the cost of electricity is meaning many growers are being left no choice but to turn their pumps off,” Mr Galligan said.
For agriculture and irrigators, this is a particularly devastating outcome as the cost of electricity is meaning many growers are being left no choice but to turn their pumps off.
- Dan Gailligan, Canegrowers CEO
Mr Galligan said many growers faced the difficult decision of choosing between a 23 per cent loss in production or a 40 per cent increase in electricity costs to apply the extra water to maintain production.
“It is a loss–loss situation for them,” he said.
“In stark contrast, electricity supply companies continue to enjoy super profits.
“Despite being one of the least efficient transmission networks in Australia, Powerlink is one of the country’s most profitable companies. No other ASX 50 stock comes close to it.”
Hugh Grant, a member of the Australian Energy Regulator’s Consumer Challenge Panel argues that for a $401 million investment, the government has achieved return of $9.4 billion over the past 15 years. Mr Grant said that was 23 times the returns of Lend Lease, 15.5 times those of Telstra, 10 times those of NAB and BHP and well ahead of Woolworths.
“There seems to be so much focus on profit taking by State-owned electricity network operators, and no one appears to be listening to the concerns of users who will have only one option - to stop using electricity all together and seek alternative sources of energy,” says Mr Galligan.
“This will only increase the costs further for those left on the grid.
“Every day businesses are closing their doors or scaling down. This is causing untold damage to Queensland jobs and the economy.
“Proactive leadership by the Queensland Government would instead help Queensland businesses grow and prosper.”
But Queensland’s Minister for Energy, Mark Bailey has hit back at suggestions that the Palaszczuk Government has not done enough to lower electricity prices.
“For the first time since the QCA started determining electricity prices, the fixed charge will reduce,” he said.
“The QCA determination shows that the network component of prices have stabilised, which is a direct result of the Palaszczuk Government’s direction to the network businesses to accept the AER decision last year.
“We are obviously concerned about the impact the determination may have on business customers, including those on transitional tariffs.
“It’s important to remember that this is a draft decision, and I encourage all stakeholders to review it and provide feedback.”
Mr Bailey also said the Palaszczuk Government was subsidising regional Queensland electricity prices, spending around $600 million each year to “ensure that 700,000 regional Queensland customers pay a similar amount for their electricity to those in South East Queensland”.
“The government is also assisting the agriculture sector to reduce their overall electricity costs through the $2.69 million Energy Savers Plus Program (ESPP),” he said.
“Under the ESPP, up to 100 whole of farm audits will be conducted by Ergon across targeted industry sectors including sugar cane.
“Participating farms are being selected in consultation with the Queensland Farmers Federation (QFF) and will be used as case studies on how to improve energy efficiency in each specific sector.”
Mr Bailey dismissed suggestions that he had “passed the buck” on the issue of electricity prices, arguing that he released a statement, along with the QCA, when the draft determination was released recently.
“(QCA)...are currently conducting a number of regional workshops as part of their consultation process,” he said.
A final decision on the recommendation is due on May 31.
