Power bills face 50 per cent jump

THE typical Queensland household now pays more for electricity than council rates.

And the gap will get worse next year, with power prices predicted to surge another 10 per cent, pushing the average home power bill to more than $2100 a year.

The rising costs make a further mockery of government assurances that deregulation of the state's power market meant more competition and cheaper prices.

The increase, being forecast by state-owned power distribution company Energex, would mean a 50 per cent jump in power bills – about $700 – since July 2007, when competition was introduced with promises by then-premier Peter Beattie that "no one will pay any more".

Council rates during the same time are expected to rise by about 30 per cent to about $2000 a year, assuming next year's increases follow recent trends. And worse is to come, according to industry experts who say growing use of renewable energy and the Federal Government's carbon reduction scheme – due to start in 2011 – will translate into further big power price increases.

"Prices are going to keep going up as far forward as you can look," industry analyst and former Electricity Supply Association of Australia chief Keith Orchison said yesterday.

Federal Government studies suggest a 20-25 per cent increase in retail power prices "in the initial years" of its carbon reduction schemes, which it plans to offset with rebates to qualifying households.

Queensland Council of Social Services director Jill Lang said yesterday her organisation would be "pushing heavily" for concessions for people unable to afford soaring power bills.

"We continue to be really concerned about this rapid rise in electricity prices and the impact on low-income households," she said.

"Electricity should be a right and everyone should have access to it."

The Queensland Competition Authority, which is currently reviewing existing pricing and tariff structures at the request of the State Government, has to make a final decision on next year's price increase before July 2010.

But Energex forecasts that prices will need to rise by about 30 per cent by 2015, starting with a 10 per cent increase next year, just to cover the cost of a proposed $6.4 billion, five-year expansion of its southeast Queensland electricity distribution network. Ergon is proposing a similar-sized investment for its network, which covers the rest of the state.

The Australian Energy Regulator is currently reviewing both organisations' investment plans to see whether they are justified, but Ergon and Energex say they will each have to spend more than $1 billion a year on network infrastructure to meet growing demand for power.

Energex chief executive officer Terry Effney said peak electricity demand in southeast Queensland was expected to rise by more than 70 per cent in the next decade.

Energy Minister Stephen Robertson declined to comment on possible price movements until the power regulators had finished their own reviews.

Source:  News.com.au / Courier Mail