Concern at proposed electricity prices rises for small business

Thursday 21 April, 2016 | By: Default Admin | Tags: QCA, electricity prices, draft determination, deregulation

The Chamber of Commerce and Industry Queensland (CCIQ) is alarmed at the electricity price increases proposed by the Queensland Competition Authority (QCA) in its draft determination.

CCIQ Director of Advocacy Nick Behrens said small business owners, who had already faced huge power bill costs in recent years, would be shocked by the planned 2016-17 figures.

Mr Behrens said CCIQ provided a submission to the QCA yesterday on the draft determination, highlighting concerns around a change in methodology that had resulted in higher prices for small businesses in regional Queensland.

The QCA draft determination provides that in 2016-17, typical customers on the main small business tariff (tariff 20) can expect an increase of $197 or 9.3 per cent in their annual bill. Typical small business customers on the seasonal time of use tariff (tariff 22A) can expect an increase of $569 or 13.6 per cent in their annual bill. 

The increase in electricity prices for small businesses is said to be driven primarily by higher energy costs and retail costs. Wholesale energy costs and the Renewable Energy Target (RET) are estimated to add 4.8 per cent to a typical bill for a small business customer on tariff 20. Increases in retail costs are estimated to add 3.8 per cent on the typical small business bill.

 bills graphic

“CCIQ is extremely disappointed by the QCA report and believe the price increase will come as a shock to small business customers who last year saw prices starting to come down,” he said.

“CCIQ has grave concerns about the impact such increases will have on business profitability and competitiveness.

“We believe small businesses are becoming disillusioned by the energy sector particularly given the State Government’s perhaps hollow commitment to ease the cost of electricity for small business over the coming years.

“Given the difficult trading environment in regional Queensland, businesses will be very reluctant to pass these increases on to customers for fear of losing trade.

“Yet at the same time most businesses have already reduced their electricity usage as much as possible, forcing businesses to try and absorb these astonishing increases.

“This will result in reducing business costs in other areas including capital expenditure and employment levels that will further damage the economy.

“In some instances there is little doubt that the impact of these electricity price rises will push some businesses permanently into the red with forced closures.”

Mr Behrens said small businesses in regional Queensland were already disadvantaged by the lack of competition in the retail electricity market.

“It is important that the QCA carefully consider the real world impact on regional small businesses when making the final determination on 31 May 2016.”

These prices do not apply to South East Queensland customers as retail electricity prices will be deregulated in SEQ from 1 July 2016.

 

 

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