"Advocating for affordable and reliable electricity in Queensland"
Source: QEUN (Queensland Electricity Users Network)
DISCLAIMER “This project was funded by Energy Consumers Australia (www.energyconsumersaustralia.com.au) as part of its grants process for consumer advocacy projects and research projects for the benefit of consumers of electricity and natural gas. The views expressed in this document do not necessarily reflect the views of the Energy Consumers Australia.”
Over the period July to early October, Compass Research carried out independent surveying among businesses in four representative Queensland regions on behalf of Queensland Electricity Users Network with support from Energy Consumers Australia.
The following gives an overview of the results.
Full detailed reports for the four areas overall and for each region can be found following the overview
The four rural regions selected - Mareeba (northern agricultural, especially irrigated), Southern Downs (southern agricultural), Whitsundays (tourism) and Mt Isa (mining), are representative of the diversity of regional Queensland outside of the main regional cities.
This diversity was also represented, at the time of the surveying, in a range of economic conditions - good growth based on agricultural expansion in Mareeba, slow conditions in the Southern Downs, Mt Isa doing it tough with the collapse of the mining boom and Whitsundays struggling to recover from the effects of Cyclone Debbie. However, while there was some variation, the main results were remarkably similar.
The four regions represented a population of 109,000.
The survey sample was large at 741 and covered all industry sectors.
Almost all relied on Ergon, the Queensland Government owned near monopoly retailer/supplier in regional Queensland, and have faced major increases of the order of 15 – 20% in the last two years as regulated retail electricity prices for a typical small business rose 11.2% in 2016-17 and 4.1% in 2017-18 = 15.3% in two years.
Electricity costs of the businesses responding as a proportion of their total costs ranged from less than 5% to more than 30% with an average of 13%.
The overwhelming response (70%) was that the businesses had suffered a loss in profitability. Only 22% said they were able or willing to pass on the cost to customers – very few in full.
Some two-thirds tried to reduce electricity consumption by modifying behaviour (e.g. adjusting air-conditioners) and 42% by installing more efficient equipment.
Some 15% invested in alternative energy generation.
Resulting losses in jobs or staff hours were recorded by 15%.
Some 25% said they increased debt carried by their businesses.
The survey indicated that about 50% of businesses are experiencing bill stress and this is common across the four regions and across most industry sectors including sectors like agriculture, tourism, mining, manufacturing & retail that underpin regional economies.
Some 22% of respondents indicated they were now extremely concerned about their ability to pay their electricity bills – that they were experiencing bill stress.
If electricity prices go up again, some 52% said they would experience strong to severe stress in their business. Some 30% said they would consider reducing staff/staff hours – a leap from the 15% who have already cut back.
Conversely if prices went down, 86% said it would increase the viability of their businesses and 35% said they would consider employing more staff.
Almost all said that the rises in electricity prices were adversely affecting their regional economies; some 34% recording effects as severe.
Businesses have tried to accommodate rising power bills by modifying electricity consumption, installing more efficient equipment and in some cases turning to alternative energy sources.
Most businesses reported they were unable to pass on the rising costs or make other compensating adjustments.
The main result has been that profitability, incomes & viability of important industry sectors have suffered. Nearly half are now reporting bill stress and about a quarter have survived by taking on more debt. The squeeze on profitability will have meant a lesser ability to pay staff higher wages.
While job and employee work hour losses have so far not been large, the reduction in employment is adversely affecting regional Queensland economies.
If the price of electricity rises again, half of businesses said they would experience strong to severe stress, more will seek to recover costs by increasing prices. Loss of employment can be expected to increase with effects on regional economies.
On the other hand, businesses clearly indicated that if electricity prices were reduced their viability would improve, with many considering employing more staff and expanding their business.
The Queensland Electricity Users Network would like to thank all the businesses - nearly 800 - that participated in the Regional Queensland Business Electricity Survey.
A wide range of businesses responded to the survey enabling us to estimate how rising electricity prices are impacting on various industries and communities in regional Queensland.
A copy of the survey report will be provided to:
The business survey remains open on the QEUN website as we consider how to continue to provide evidence based advocacy.
The Council of Australian Governments’ (COAG) Energy Council commissioned an independent review of the National Electricity Market after the state-wide blackout of South Australia on 28 September 2016.
The aim of the review is to provide advice to COAG on a coordinated national blueprint that would provide Australia with reliable, secure and affordable electricity.
The 5 member panel of the Finkel Review is chaired by Dr Alan Finkel, the Chief Scientist of Australia. COAG did not appoint an energy consumer/customer member to the Finkel Review panel.
The Queensland Electricity Users Network provided a detailed submission and participated in a teleconference with the Finkel Review panel. The Finkel Review received 392 submissions.
The Finkel Report was presented to COAG Leaders on 9 June 2017.
The 50 recommendations in the Finkel Report can be accepted or rejected by individual members of COAG.
The members of COAG are the Prime Minister, state and territory Premiers and the President of the Australian Local Government Association.
The Federal Government announced on 20 June 2017 that it will accept 49 of the 50 recommendations. The recommendation regarding the Clean Energy Target will be further considered by the Federal Government and more analysis undertaken.
Responses from other members of COAG are yet to be clarified.
For further information on the Finkel Report and to view the QEUN’s recommendations to the Finkel Review please click on the following links:
The Queensland Government is responsible for setting the regulated retail prices for regional Queensland.
The Queensland Government can reduce power bill stress because it owns and controls most of Queensland’s electricity assets:
Retail competition charge
The Queensland Government has chosen to continue to charge Ergon Retail customers for retail competition that doesn't exist in regional Queensland.
The charge for retail competition adds 5% to every business power bill and 2% to every household power bill in regional Queensland.
Solar Bonus Scheme charge
The Queensland Government has also chosen to re-instate a charge for the Solar Bonus Scheme.
The charge for the Solar Bonus Scheme adds 3% to every business and household power bill in regional Queensland.
For the last 3 years the Solar Bonus Scheme has been paid for by the Queensland Government. The Solar Bonus Scheme pays eligible households a Solar Feed-In Tariff of $440/MWh. The Solar Bonus Scheme closed to new applicants in 2012 but the Queensland Government must pay eligible households until 2028. The Solar Bonus Scheme should continue to be paid for by the Queensland Government.
Wholesale electricity prices
In 2019-20 Queensland will have the cheapest wholesale electricity prices in the National Electricity Market – $54/MWh. However, customers of Ergon Retail will pay $89.16/MWh.
In 2020-21 customers of Ergon Retail will pay $80.90/MWh. Wholesale electricity prices in the National Electricity Market are currently trading at less than $40/MWh (June 2020) and around $42/MWh for financial year 2020-21.
Ergon Retail customers are not receiving the benefit of Queensland having the lowest wholesale electricity prices in the National Electricity Market.
In 2014-15 the Queensland Government received $147 million in revenue from its generation assets, in 2018-19 it expects to receive $1,095 million – almost a billion dollars more.
The Queensland Government needs to direct its 3 wholly owned generators (Stanwell, CS Energy and CleanCo) to cap their wholesale electricity price at $70/MWh.
Click here - For more information on how the Queensland Government can drop business and household power bills please read our submission.
Click here - To understand the widespread support from industry and social organisations for our recommendations please.
| 28 | June | 2018 | Jennifer Brownie Interview ABC Radio with Linda Mottram : Spike in electricity disconnection rates in QLD signifies worrying trend for economy : Link |
| 6 | April | 2018 | Politics mire energy fixes |
| 6 | April | 2018 | Jennifer Brownie Radio Interview with ABC Far North |
| 18 | February | 2018 | Brisbane Courier Mail : Power Costs A Shocker |
| 16 | February | 2018 | Mt Isa North West Star : Register for power prices workshop |
| 22 | November | 2017 | Cairns Post : Watt A Bill Shocker .pdf |
| 10 | November | 2017 | Mt Isa North West Star : Election issues turn to escalating electricity prices |
| 09 | November | 2017 | Brisbane Courier Mail : Power bill price pain so bad it is 'threatening jobs |
| 12 | September | 2017 | Mareeba Advertiser : Mareeba leads the charge on electricity |
"Advocating on behalf of peak industry and social organisations for affordable and reliable electricity in Queensland"
Queensland Electricity Users Network (QEUN) Phone: (07) 40312 865 Email: admin@qeun.com.au Web: https://www.qeun.com.au 38 Grafton Street, Cairns, QLD, 4870 PO Box 2148, Cairns, QLD, 4870
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