The government’s plans for growing agriculture in Queensland are on the path to failure if proposed 10.3% electricity price hikes are not reeled in now, says peak sugarcane grower body, CANEGROWERS.
The sizable hike has sent shockwaves through regional Queensland after it was released in the Queensland Competition Authority’s (QCA’s) draft determination on 2016-17 regional regulated electricity prices, today.
Last year the Queensland Government said power prices would be reined in; QCA reported electricity cost pressures were easing; and reflecting lower interest rates, the Australian Energy Regulator cut Ergon and Energex’s capital recoveries – the largest component of the electricity costs.
“The proposed hikes show the electricity pricing system is broken. Prices are out of control,” says Dan Galligan, CEO of peak group CANEGROWERS.
He says what makes the situation even more dire is that the hikes, which will impact on rural householders, businesses and farmers across rural Queensland, come on the back of a series of increases amounting to a 96% cumulative increase over the last seven years. Amongst the worst hit will be Queensland’s irrigated farmers.
“The spiralling cost of electricity to run pumps to irrigate cane land is becoming an untenable outlay and many of our growers are being forced to make the decision to switch the pumps off and loose vital productivity and profitability. It’s unacceptable, especially given it doesn’t have to be this way,” says Mr Galligan.
“There seems to be so much focus on profit taking by State-owned electricity network operators, and no one appears to be listening to the concerns of users who will have only one option – to stop using electricity all together and seek alternative sources of energy. This will only increase the costs further for those left on the grid.
“This is a complex issue but we are sick of the buck passing. On behalf of our members we have been making a submission into various reviews almost every month now for the past three years, and still our solutions are ignored,” says Mr Galligan.
CANEGROWERS has broken down what must be done into three key points:
- Say NO to further price rises
- Say YES to restructuring & streamlining highly profitable electricity providers, so the cost of electricity can be reduced
- Say YES to fairly priced off-peak rates and industry specific tariffs
CANEGROWERS says it is interesting to see that QCA is recommending increases when Mr Hugh Grant from the Australian Energy Regulator Consumer Challenge Panel identifies that “… the Government should immediately direct Powerlink, Energex and Ergon Energy to cut revenues from 40-50%, giving price relief of about 35% to most consumers.” He has recommended, “The long-term solution is to fix the regulatory rules to ensure it delivers fair returns rather than excessive returns to the networks.”
Mr Galligan says CANEGROWERS could not agree more.
Source – CANEGROWERS