Queensland Energy Minister Mark Bailey defends the government’s approach to electricity price control. Photo Kevin Farmer / The Chronicle
Queensland Energy Minister Mark Bailey defends the government’s approach to electricity price control. Photo Kevin Farmer / The Chronicle Kevin Farmer

Power prices: Your questions answered

A question and answer with Energy Minister Mark Bailey about electricity prices.

QUESTION: Hugh Grant, who sits on the energy regulator's consumers' challenge panel, says electricity prices need to come back 40% to avoid a death spiral which would leave the grid unsustainable. Do you accept that prognosis and if not, why?

ANSWER: No. The Queensland Government considers that networks play an important role in ensuring secure and reliable electricity supplies to customers now and into the future - and while demand had contracted over the 2010-2015 period, it has now stabilised as have prices with modest falls for some customers after 43% increases under the former Treasurer Tim Nicholls. 

Last year the Palaszczuk government intervened to direct Energex and Ergon to not appeal the Australian Energy Regulator's decision to curb network costs, and this is helping keep prices stable.

That direction would not have been possible if our power assets had been sold off like the LNP proposed, and would still do given the chance.

QUESTION: Has the government modelled the impact of increasing household energy independence on the grid's viability and if not, why, given the growing attraction of solar and battery storage solutions?

ANSWER: This government is strongly committed to a renewable energy future - that is why we have an Independent Expert Panel investigating credible pathways to reaching a 50% target by 2030. The panel will focus on issues such as integration of renewable energy into the electricity system.

We will be closely monitoring the interaction of PV and battery uptake on the grid. We are in a good position to learn from the successes and problems that have been faced by renewable leaders like Germany, California and South Australia.

The battery revolution is unfolding and we are working hard through Energex and Ergon to ensure Queensland is prepared. We're undertaking trials in Cairns and Townsville with companies like Sunverge, to shed light on how technology and tariffs will shape the future energy network.

QUESTION: Mr Grant has claimed regulatory values set at artificial levels have to be changed downward in the order of 50% to return reasonableness to the pricing structure. Is that something the government would consider and if not, why?

ANSWER: The government is clearly focussed on keeping downward pressure on prices. We are moving to a fully deregulated market in SEQ from 1 July 2016.

In SEQ, a household switching from the regulated retail electricity rate to the best market offer can save a household up to $230 per year.

The government is currently considering the Queensland Productivity Commission's report on its inquiry into electricity prices which includes variables such as the asset values. We need to ensure that we have an electricity market that can deliver to all customers.    

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