Electricity prices

Population growth, an ever-increasing demand for energy and the need to expand and upgrade Queensland's electricity infrastructure are among the many factors that impact on the cost of electricity.

How electricity costs affect prices

The price you pay for electricity is made up of:

  • generation costs - creating electricity at a power station
  • transmission costs - building and maintaining Queensland's extensive network of high-voltage powerline infrastructure
  • distribution costs - building and maintaining Queensland's network of distribution poles and wires that deliver electricity to homes and businesses
  • retail costs - connecting customers, billing customers and managing accounts.
  • green scheme costs - costs associated with the Australian Government's Renewable Energy Target.

The following costs impact on electricity prices.

Electricity infrastructure

Queensland's electricity distributors Energex and Ergon Energy spent about $15.6 billion from 2010 to 2015 on electricity network infrastructure, maintenance and operations to cope with increased electricity demand. We all pay a portion of this cost through our electricity bill. This investment in our electricity system increases the transmission and distribution components of the retail electricity prices.

Fuel sources

Increasing costs of coal, gas and other fuels used to produce electricity has raised the generation cost in retail electricity prices. As fuel costs increase, they drive up the price we pay for electricity through the regulated tariffs set by the Queensland Competition Authority (QCA) and the market contracts offered by private retailers.

Regulated electricity prices

The Queensland Government has delegated responsibility for determining regulated retail electricity prices for 2015-16 to the QCA.

Following the Government’s decision to delay the deregulation of retail electricity prices in South East Queensland (SEQ) for 12 months, the QCA’s final determination for 2015-16 will apply across the state, as it has in previous years, This will enable the Queensland Productivity Commission to conduct an independent review of price deregulation as part of its public inquiry into electricity prices.

Current regulated electricity prices will apply until 30 June 2016.

Regional support

The costs involved in supplying electricity to Queenslanders in regional and remote areas are much greater than for those in SEQ. This is due to the high costs of transporting electricity over long distances and fewer people in remote and regional Queensland to share the costs of the towers, poles and wires that deliver them electricity.

The Queensland Government supports regional and rural Queenslanders by subsidising them for the additional costs involved in supplying electricity outside SEQ, through payments to Ergon Energy. This subsidy is called the Community Service Obligation payment.

Related links

Last reviewed
June 23, 2015