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Retail energy prices in regional QLD will increase 28% from 1 July
The Queensland Competition Authority (QCA) regulates retail energy prices in the Ergon Energy distribution zone, which covers northern and regional QLD. The Ergon Energy zone is serviced by Ergon Energy as a retailer, with pricing set by the QCA. In the South East corner of QLD, the Energex zone has full retail competition.
QCA today released its final determination for retail electricity pricing across the Ergon Energy zone.
Retail electricity prices for the Ergon zone across regional QLD will rise 28% from July 1 2023
In unwelcome news for Ergon energy consumers, the QCA determination is in line with the default offer price announcements from regulators across the rest of the NEM — prices are going up. Way up.
QEC puts the blame squarely on the increase in wholesale prices over the past 12 months, which has driven increases in the contract prices that retailers are exposed to when purchasing their forward contracts and hedging arrangement.
Although the federal government intervention in December 2022 to impose a gasp price cap has translated into reduced wholesale electricity prices, contract prices remain high relative to their trading history (see the orange line in the chart).
As a result, the trade-weighted contract price has continued to increase
(the white line in the chart). As the trade-weighted price is a key input in determining wholesale energy costs, it is a key driver of the increases in electricity prices this year.
In most other jurisdictions, this kind of price notice would be accompanied by a recommendation for energy consumers to scour the market for the best-priced plans.
Unfortunately for those in north and regional QLD, Ergon is the only retailer, and there are no alternatives.
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