Cotton growers in both NSW and Queensland are appalled at recent developments to electricity pricing regulation that have left farmers still further away from both price relief and pricing reform.
The pain began in late May with a decision by the Federal Court which will significantly impact growers in NSW.
The Australian Energy Regulator (AER) had sought to contain excessive spending by power companies for the 2014-19 period, arguing in the Federal Court that NSW electricity distribution businesses were inefficient. The AER’s determination significantly cut power prices, but the energy companies successfully appealed to the Australian Competition Tribunal, forcing the AER to take the issue to the Federal Court.
Unfortunately, the Federal Court ruled in favour of the power companies, an extremely worrying development because it sets a precedent on how the AER will be able to regulate the cost of electricity pricing into the future.
It is certain that, without a strong regulator to stop persistent gouging by the electricity companies, the increases will continue indefinitely. The AER, through the Limited Merits Review process, has been shown to be a toothless tiger.
Both Cotton Australia and the NSWIC urged the AER to pursue a further legal challenge, and also called on the Council of Australian Governments (COAG) to assume a leadership role step in to fix the problem.
Queensland growers have not been immune to electricity pricing pain. Less than a week after the Federal Court’s decision hit NSW growers, the Queensland Competition Authority (QCA) announced changes to the regulated retail electricity pricing regime that would have seen prices increase dramatically for both consumers and business users.
Under the QCA's determination, users on Tariffs 62, 65 or 66 - which captures the majority of irrigating farmers and cotton growers in Queensland - would have seen electricity prices rise by more than 8 percentage points.
However, the QCA's determination announcement was swiftly followed on the same day by an announcement indicating the Government-owned wholesaler - Energy Queensland - had been instructed to remove the costs of the solar bonus scheme from network charges until at least 2020, a move the Government says would more than halve the increase for consumers.
The Government says large businesses and customers on transitional tariffs will share in the reduced electricity pricing increase its action will create, and it has directed the QCA to release a new pricing regime by mid-June.
Cotton Australia strongly suspects that even the reduced increase will far outstrip the inflation rate.
Growers want a joint effort to solve the root cause of the electricity pricing issue.
Farmers have suffered for too long - now is the time for strategic, problem-solving action.
