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.
South East Queensland
Retail electricity prices in South East Queensland (SEQ) were deregulated on 1 July 2016. Electricity prices in SEQ are now determined by electricity retail providers, with customers able to choose between standard retail contracts and competitive market retail contracts.
This means that in SEQ, the Queensland Competition Authority no longer regulates retail electricity prices for small business customers (those consuming less than 100 megawatt-hours (MWh) per year). Instead, retailers will publish their contract offers online and on the Australian Energy Regulator’s independent price comparator website Energy Made Easy, where customers can search and compare available product offerings.
Retail prices for large customers (those consuming more than 100 megawatt-hours (MWh) per year) in SEQ have been deregulated since 2012.
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Regulated prices still apply to small business customers (those using less than 100 MWh per year) in regional Queensland and are set annually by the Queensland Competition Authority. Small businesses can switch to a market retailer, but they (and the premises) are no longer able to return to Ergon Energy as a retail customer, even if a new account holder is established (including a new occupant). However, they can ask their market retailer to switch them to the retailer’s standard retail contract. They will then be charged the notified prices, just like Ergon Energy customers, but they cannot return to Ergon Energy as a retail electricity customer.
Large business customers in regional Queensland can also access regulated prices provided they are, and remain customers of Ergon Energy. Once a large business switches to a market retailer, they (or future customers at the premises) cannot return to Ergon Energy as a retail customer.
Also, customers at the premises will not be able to access regulated prices from the market retailer unless the site is reclassified as a small customer site (usage less than 100 MWh per year) by the electricity distributor, Ergon Energy. However, the incumbent market retailer (also known as the financially responsible market participant) is obliged to supply electricity on fair and reasonable terms to large customers, and for small business customers, on terms equivalent to the notified prices Ergon Energy retail provides.
If Ergon Energy retail is prohibited from selling electricity to a premises, the electricity distributor, Ergon Energy, is able to advise customers of the responsible market retailer.
The current regulated electricity prices apply to customers in regional Queensland until 30 June 2018.
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: to build and maintain the state's network of high voltage powerline infrastructure
- distribution costs: to build and maintain the network of low-voltage poles and wires that deliver electricity to homes and businesses
- retail costs: connecting customers, billing customers and managing their accounts
- green scheme costs: costs associated with the Australian Government's Renewable Energy Target
- metering costs: providing, maintaining and reading customer meters and managing meter data.
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 (CSO) payment. For 2016-17, the total CSO to support regional and rural Queenslanders was $612.7 million.