Rural Weekly Comment, February 22, 2018

COMMENT 3

Rural Weekly Comment, February 22, 2018

By Kevin Borg, Chairman CANEGROWERS Mackay

Our Government needs to step in now on crippling energy pricing if small businesses reliant on electricity are going to survive in regional Queensland.

The sugar industry is just one of many sectors that is being severely impacted by the high cost of electricity, and yet there is no relief in sight.

CANEGROWERS is currently lobbying hard for the implementation of an electricity generation and distribution system that will efficiently, sustainably and affordably deliver electricity to agriculture, but also to all other Queenslanders.

Anyone with an ear to the ground will now be aware that electricity prices have risen by an incredible 130 per cent in the past nine years. This has an unyielding impact on the input costs of agriculture but is also hurting every Queensland business and household.

Tackling electricity sector reform is complicated. There are many different decision-makers at State and Federal levels with varied motivations and objectives, and they all need to be convinced we have a serious problem.

Ergon, Energex and Powerlink have been recording record profits and contributing about $1.3 billion, yes billion, to the State Government’s coffers.

One of the major contributors to the untenable prices in regional Queensland is the non-existent competition – Ergon Energy has, by these circumstances, a monopoly in the energy supply market.

This is not the case in the south east corner where competition is driven by government, and where it is delivering retail prices of up to 25 per cent less.

Affordable electricity would most certainly promote the growth and development of irrigated agriculture and secure jobs in our regional communities.

Businesses can try to decrease these high costs in various ways including installing more energy efficient infrastructure, but this does not, and will not fix the cause of the problem. This in fact would allow more room for the electricity provider to gouge prices if so motivated.

It became increasingly apparent that the Government is not serious about dealing with this issue when it gave the Queensland Competition Authority (QCA) its annual delegation to review electricity prices very late last year.

This resulted in the QCA seeking submissions by January 16 making it virtually impossible for organisations such as CANEGROWERS to tender a submission over the Christmas holiday period.

The Australian Competition and Consumer Commission (ACCC) also previously expressed concern about the adverse impacts of the excessive retail costs and margins on electricity prices. The ACCC is due to report the outcome of its inquiry into the supply of retail electricity and the competitiveness of retail prices to government in June 2018.

The longer this takes to resolve, the more windfall revenue Ergon is making straight from the households and businesses of regional Queensland. This must stop. An efficient and effective system would lower prices.

CANEGROWERS has been a front runner in attempting to ensure performance incentives are introduced for all in the electricity supply chain to efficiently and cost effectively deliver electricity to Queensland customers.

ENDS

For further information contact Kevin Borg (0429 876 441).