CCIQ satisfied by umpire’s decision on energy revenue

Thursday 29 October, 2015 | By: Darrell Giles | Tags: ergon, energex, electricity prices, AER;

The Chamber of Commerce and Industry Queensland (CCIQ) welcomes the decision by the Australian Energy Regulator (AER) on future revenue for Ergon and Energex.

A CCIQ spokesperson said it was clear that the AER had taken the interests of Queensland consumers, including the state’s 400,000 small businesses, seriously.

The AER has allowed a total revenue spend of $6.3 billion for Ergon and $6.6 billion for Energex.

The spokesperson said this was an overall reduction of 19.3 per cent and 16.2 per cent respectively than the revised proposals provided by Ergon and Energex.

“This will render price reductions for SMEs of $36 (1.2 per cent reduction) in 2016/17 and then $44, $36 and $30 in subsequent years.”

CCIQ also supported Premier Annastacia Palaszczuk’s announcement that the State Government would block Ergon and Energex from challenging the AER’s final determination.

“The overall reductions are not as drastic as they were in NSW, where they were around 40 per cent,” the spokesperson said.

“There are a range of efficiencies that the network businesses can achieve, not only through labour force size and redundancies.

“We believe there are more efficiencies that can be found across the organisations as the networks’ businesses are historically very inefficient operators,” the spokesperson said.

“Ultimately, Queensland consumers should not be paying for the networks’ business inefficiencies.”

CCIQ said the measures announced by the AER would likely produce price stabilisation for consumers as opposed to any significant price reductions.

But that was better than the previous five years when consumers had seen unsustainable increases in electricity prices with power bills more than doubling.

CCIQ conducted a survey of 1100 small businesses in December 2014 which found increasing electricity prices the most significant business cost issue, with 65 per cent indicating a major or critical concern with the cost of energy.

CCIQ made a submission to the AER on the Ergon and Energex regulatory revenue proposals for 2015-2020. It focussed on bringing down the costs of capex, opex and the WACC, and also addressed issues such as consumer engagement, the solar bonus scheme and incentive payments.”

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