The Queensland Competition Authority (QCA) has released its final determination on regulated retail electricity prices that will apply to customers on standard contracts in regional Queensland from 1 July 2023.
QCA Chair Professor Flavio Menezes said electricity prices will rise for customers in regional Queensland this year.
“The significant increase in prices is mainly due to an increase in energy costs—in particular, wholesale energy costs, which are the costs that retailers incur when purchasing electricity from the National Electricity Market (NEM),” Professor Menezes said.
Professor Menezes explained that retailers adopt a range of strategies to reduce their exposure to changing prices in the NEM, including to hedge their risk through the purchase of ASX contracts. This 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,” Professor 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.
“While we did see falls in ASX contract prices following the government price caps on coal and gas, prices remain elevated relative to previous years. Also, retailers had already purchased ASX contracts to meet their customers’ energy demands for 2023–24, including between May and December 2022 when prices were still substantially higher.”
Professor Menezes said the increase in electricity prices would result in a 28.7% increase in the annual bill for a typical residential customer (on tariff 11) and a 26.8% increase for the typical small business customer (on tariff 20).
“The annual bill for a typical residential customer is forecast to increase by $429, from $1,496 to $1,926. For the typical small business customer, the annual bill is forecast to increase by $511, from $1,907 to $2,418.”
Prices are set in accordance with the Queensland Government’s uniform tariff policy, which means most regional customers pay less for electricity than it costs to supply them.
Professor Menezes acknowledged the increases could place additional pressure on households and businesses that were already facing cost of living challenges.
“For customers facing hardship, there are range of government concessions, rebates and other forms of assistance available,” Professor Menezes said. “A list of the key support measures and other helpful resources is available in our information booklet. I strongly encourage customers to contact their retailer to discuss what support measures may be available to them.”
The final determination is available on the QCA website.
The QCA has also released a final determination on the solar feed-in tariff, which is the compensation a customer in regional Queensland will receive for the electricity they export to the electricity grid.
The feed-in tariff for 2023–24 is 13.441 cents per kilowatt hour, which is 44.5% higher than last year’s feed-in tariff.
Professor Menezes said consumers with rooftop solar PV may be able to reduce the impact of electricity price increases by shifting their load to times during the day when there is solar generation.
Media enquiries: Cole Lawson Communications, 07 3221 2220.
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