CCIQ Supportive of Business Electricity Changes Planned by State Government

Thursday 26 April, 2012 | Tags: Energy Environment and Sustainability

In response to media speculation on the forced shift to market contracts for high energy use businesses, the Chamber of Commerce and Industry Queensland (CCIQ) has said that small and medium sized businesses in the main have little cause for concern.

CCIQ has today moved to allay alarmist media statements that claim businesses may face electricity increases of up to 85 per cent, instead highlighting that market contracts have been proven to provide cost savings for many Queensland businesses.

In 2011 the previous Queensland Government announced a full review of the electricity pricing methodology and tariff structures and at the same time announced that non-residential customers in the Energex network area consuming more than 100 megawatts per annum would be unable to access regulated retail tariff and would have to transition to market contracts from 1 July 2012.

CCIQ consulted thoroughly with the Queensland Government and Queensland Competition Authority on this matter and undertook a full review of the impacts this change would have on Queensland businesses.

Accordingly CCIQ does not believe this will disadvantage any small or medium business in Queensland and that shifting to market contracts presented opportunities for businesses to seek a more competitive retail price for their electricity.

Businesses have been able to voluntarily shift to market contracts for a number of years and that the fact that over 95 per cent of businesses in south-east Queensland had already done so, on the basis there is proven benefit from shopping around for a better deal from electricity retailers.

However, CCIQ did agree that businesses should ensure they fully understand the implications of moving to market contracts and as with all areas of business, should carefully consider the fine print before agreeing to any market offer.

CCIQ has also for a number of years argued strongly that small and medium business should be provided access to dispute resolution services such as those afforded to residential customers through the Queensland Energy Ombudsman.

CCIQ believes this is important to help facilitate the uptake of market contracts and growth of competition in the electricity market which should lead to more competitive pricing in the long term.

Businesses with questions about this change or who need advice on negotiating and comparing market contracts should contact CCIQ on 3842 2244 or email policy@cciq.com.au.


Facts about Market Contract for Electricity:

  • As at 31 December 2011, over 95 per cent of large/non-residential customers in South-East Queensland were already on market contracts, meaning that only 530 businesses remained on the non-contract regulated tariff rates.
  • From 1 July 2012 all non-residential consumers with usage greater than 100 megawatt hours per year (or 100,000 Kilowatt hours per year) will no longer be able to access electricity on the noncontract regulated tariff rates.
  • This will only apply to those businesses in the Energex-distribution area which is South-East Queensland and will not apply to businesses in the Ergon area (being the rest of the state.)
  • CCIQ understands that Energy retailers have been active in communicating these changes with their existing customers affected by this change.
  • The basis for this policy position is that significant competition exists in the SEQ distribution area (over 20 retailers operate in this area) and this move should hopefully drive further competition and price competitiveness in the Energex area.
  • Calculations undertaken by CCIQ have further confirmed the advantages for large business users moving to market contracts. Based on a comparison of the 2012-13 notified tariffs with the Energex network tariffs for small and medium business we estimated that a business consuming 100Mwh/annum would save over $700 per month (and this excluded any additional discounts or negotiated benefits commonly offered by retailers).