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We pay for what we use
Did you know people living in South-East Queensland use more electricity than the whole state of South Australia?
As Queensland's population increases, and we continue to buy and use more energy-hungry appliances like home air-conditioners and plasma televisions, our electricity demand sky-rockets.
When we combine this increased demand for electricity with large numbers of people choosing to use it at the same time (peak demand), it creates the need to build more electricity infrastructure, to ensure that we can all continue to enjoy a reliable electricity supply and the lifestyle to which we are accustomed.
To understand why prices change, we need to look at how the price we pay for electricity is calculated.
What is a regulated tariff?
If you are not on a market contract with your electricity retailer, the electricity you use is charged at a regulated tariff notified electricity price.
If you are a domestic on a market contract with your electricity retailer, you can choose to return to regulated tariff prices when your contract ends.
What is included in the tariff?
Queensland's independent economic regulator, the Queensland Competition Authority, reviews the regulated tariffs each year and determines a new rate based on a number of factors (which are explained below).
The price you pay for electricity is made up of four costs:
- Generation costs - creating electricity at a power station
- Transmission costs - building and maintaining the state's extensive high voltage powerline infrastructure
- Distribution costs -building and maintaining the state's network of poles and wires that deliver electricity to homes and businesses
- Retail costs -connecting customers, billing customers and managing accounts.
Wherever we live, we pay the same - regional subsidy
Queensland is a large state, with vast distances between our cities and towns. The costs involved in supplying electricity to regional and remote Queenslanders is much greater than for those in the south-east corner of the state. This is due to the high cost of building infrastructure to transport electricity over long distances. There are also fewer people in remote and regional Queensland to share the costsof the transmission towers and poles and wires that deliver electricity.
The Queensland Government ensures that all Queensland electricity customers of a similar type supplied through the distribution systems of ENERGEX and Ergon Energy have access to electricity no matter where they live. It does this by subsidising electricity for regional Queenslanders through payments to Ergon Energy. This subsidy is called the Community Service Obligation payment. This means that customers in Roma pay the same rate for their electricity ascustomers in South East Queensland, not the true cost of supplying electricity
What can I do?
The best way to manage your electricity bill is to look at ways you can reduce the amount of energy you use at home. Download a copy of the saving energy fact sheet (PDF, 338kB) for tips on how to reduce your energy use and the Queensland Government programs and rebates available to help you. Or check out the energy savings calculator to work out how much energy you use for key items around the home.
Last updated 28 June 2011