Few positives in planned electricity price rises

THE Queensland Competition Authority has released its proposed changes to electricity tariffs and prices for the coming financial year - and the report makes grim reading for farmers.

On a positive note, the QCA has listened to industry's suggestion to retain a number of the tariffs used by farmers, which allowed them to gear their businesses toward night-time electricity usage, save on bills and reduce peak demand on the grid.

These transitional tariffs will be available for up to seven years and allow savings of about 15 cents per kilowatt hour off peak compared with the new time-of-use tariff (tariff 22), which provides a saving of only five cents per kilowatt hour off peak.

Larger irrigation enterprises will also be able to access the extended seven-year transition period, which is further positive news as these enterprises were to face cost increases of well above 200% if they had to shift to large business tariffs in 2013-14.

However, the bad news is that no matter which tariff a farmer uses, he or she is looking at large cost increases.

The transitional tariffs will increase between 12.5-21% on July 1, depending on the tariff.

These are steep increases for irrigation enterprises to cope with in 2013-14 and they come on top of increases between 10-20% this financial year. Most irrigation enterprises can expect increases of 17.5% next financial year.

These increases apply to the traditional irrigation tariffs (tariffs 62 and 65). However, tariffs 63 and 64 are being removed without a transition period, so enterprises with these tariffs will have to shift to a suitable alternative transitional tariff or a new regulated tariff such as tariff 20 or 22.

Irrigators who are on the transitional tariff 21 potentially face the maximum 21% increase in 2013-14.

Rising electricity prices remain a major concern for irrigators, with QCA annual determinations providing no certainty for irrigation business planning and so threaten to undermine the State Government's plans to increase agricultural production.

QCA seeks submissions on the tariff proposals by March 22 and QFF will make a submission addressing concerns about cost increases.

Topics:  joanne grainger power prices qff

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