Small business owners demanding power cut

THE State's peak business group has called on regulators to intervene in Queensland's power rip-off as new figures suggest the much-vaunted energy "death spiral" is well under way.

The Chamber of Commerce and Industry has lodged a submission to the Australian Energy Regulator saying the major cost drivers of high power bills must be addressed.

Meanwhile, consumer advocate Queensland Electricity Users Network says a net loss of 4000 small business customers has occurred in regional Queensland in the three years to 2018-19 and that unless prices are cut "the death spiral for network supplied electricity will accelerate".

The chamber says the cost of electricity is a major issue for business with many at or close to breaking point because of the increases which have occurred over the past decade.

It wants the State Government and AER to address the major cost drivers before the regulator makes a final determination on approved five-year revenues for State-owned corporations Ergon and Energex in April.

It says those drivers are the significant overvaluing of assets - leading to higher prices - and the use of competitive neutrality policy allowing State-owned corporations to boost prices by accounting for corporate taxes they do not pay.

"Writing down the values of Queensland's networks would result in savings of just over $300 per year for Ergon Energy customers …" CCIQ's Gus Mandigora said.

QEUN co-ordinator Jennifer Brownie said Ergon's loss of business customers was a major contributing factor to big falls in electricity demand.

"Ergon Network expects to supply less electricity over the next regulatory period. This has serious repercussions for the economy, jobs and the long-term viability of the Ergon network," Ms Brownie said.


Great Northern Laundry owner Mark Bogiatzis. Picture: Evan Morgan
Great Northern Laundry owner Mark Bogiatzis. Picture: Evan Morgan


Townsville business owner Mark Bogiatzis of Great Northern Laundry is one who has reduced his business's demand for network power by installing a solar system.

Mr Bogiatzis said it had cut the business's demand for grid power by about a third but that electricity prices were still too high.

"If you want productivity and manufacturing, you need to lower the price of electricity," Mr Bogiatzis said.

He said business people in the United States told him they loved Donald Trump because he gave them a pay increase, a tax cut "and the most important thing he did was cut the price of electricity".

In a draft decision, the AER will allow Ergon to recover $5787.9 million from its customers for 2020-25 - about $727.9 million less than Ergon proposed - estimating it will save residential customers $64 and business customers $82 by 2024-25.

It also reviewed tax allowances, reducing them for Ergon by $181.6 million, as well as reducing its Weighted Average Cost of Capital.

The CCIQ acknowledged the reduced tax allowance but said they should be "scrapped entirely".

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