Updated July 10, 2017 19:19:06
The Queensland Government has defended its role in electricity pricing amid allegations state-owned generators have been “gaming the system”.
Federal Government analysis of the states’ energy markets found wholesale prices were 30 per cent higher in Queensland than in other states and territories.
The Queensland Government said its consumers were still paying less than other jurisdictions where electricity is run by private operators.
But federal Energy Minister Josh Frydenberg said Queensland’s state-owned operators were to blame for the discrepancy.
“In Queensland, your state-owned generators — and this is a very strong allegation based on the evidence — have been gaming the system,” Mr Frydenberg said.
“What they’ve been doing is holding back their supply and then late into the period into which electricity prices are set, bidding in artificially high prices.
“Why in Queensland, when you’ve got state-owned utilities and generators, why are you paying so much for electricity?”
Mr Frydenberg asked the Queensland Government to look at the bidding system and direct the state-owned generators.
“These government-owned generators have been doing well at expense of Queensland consumers,” he said.
But Queensland’s Energy Minister, Mark Bailey, said the prices Mr Frydenberg referred to were not what consumers saw on their power bills.
Mr Bailey said wholesale power costs in his state had been reduced under his Government’s recent energy reform plan.
“What we did a month ago, is we released a whole range of energy reforms that dealt with attacking the wholesale price and getting it down,” Mr Bailey said.
“It is now the lowest wholesales futures price on the eastern seaboard for the next three years in a row because our plan had a comprehensive strategy to deal with this.”
Mr Bailey said electricity price increases were still less in Queensland compared to some other jurisdictions because of the state-owned system.
“Now we’ve got the lowest wholesale futures price compared to NSW, Victoria and South Australia for the next three years running, because we’ve managed our public assets well.”
Tony Wood, energy program director at the Grattan Institute, said there was no clear explanation for why Queensland has seen high electricity prices in recent years.
“There is a problem, whether it’s caused by legal or illegal behaviour — and I’m not suggesting either is the case — needs to be properly investigated [by regulators],” Mr Wood said.
“In the short term, the Queensland Government has taken action in response to the evidence.”
But Dr Wood believed the state would be better off with more private operators in the electricity market.
“That doesn’t mean that a monopoly privately-owned investor wouldn’t do the same thing, so we still need to have tough, clear, consistent regulation,” he said.
First posted July 10, 2017 18:59:18