Regional Queensland monopoly a cash cow

Queensland Electricity Users Network queries competition charge


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Smoke and mirrors: The Queensland Electricity Users Network is questioning regional competition charges imposed by Ergon Energy Retail in parts of Queensland.

Smoke and mirrors: The Queensland Electricity Users Network is questioning regional competition charges imposed by Ergon Energy Retail in parts of Queensland.

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An Ergon Energy Retail charge for competition that doesn't exist is costing regional Queensland $90 million, cutting jobs and sending small businesses to the brink.

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An Ergon Energy Retail charge for competition that doesn't exist is costing regional Queensland $90 million, cutting jobs and sending small businesses to the brink.

The Queensland government's wholly owned retailer is able to charge residential users 25 cents a day, and small businesses 28 cents, thanks to an Australian Competition and Consumer Commission estimate that it costs $48 to acquire and retain an electricity customer.

Queensland Electricity Users Network coordinator Jennifer Brownie said the near monopoly held by Ergon Energy Retail meant it didn't have to fight to acquire or retain customers in regional Queensland and was therefore receiving $56m from residential customers and another $34m from small business that it hadn't had to work for.

"An average home in regional Queensland pays about 25 cents per day for non-existent retail competition," she said.

"With over 600,000 residential customers this amounts to a drain of $56 million from the regional economy.

"A typical small business in regional Queensland will pay about 28 cents per day.

"All of that's dropping into a money tin called the Queensland Treasury, which may not come back to the regions.

"Imagine what you could buy locally with that money."

It meant regional Queensland was being used as a cash cow by the state government, she said.

Last year Ergon Energy Retail more than doubled its profits to $263 million, with $177 million being paid to the state.

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Ms Brownie said the best way to get power bills down was to charge no more than what was necessary to supply electricity.

"The people that are earning money will spend it locally, and you'll get more back that way than by dragging it out of them by billing them."

Opposition energy Michael Hart said the Australian Energy Regulator set the rules for all of Australia but regional Queensland didn't have competition.

"Headwork charges add 6pc to the cost of the network part of your power bill, which is 50pc of your total bill," he said. "QFF and Canegrowers are among those that have been calling for its removal."

Read more: Irrigators' electricity price woes continue

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