February 15, 2010The Bligh Government has raised serious concerns about modelling used by the independent Queensland Competition Authority (QCA) to calculate regulated electricity prices for 2010-11.
Mines and Energy Minister Stephen Robertson says the Government has lodged a strong submission challenging the QCA over its draft determination recommending electricity prices rise by 13.8 per cent from July 1.
"The government is deeply concerned about the rising costs of electricity supply and the pressure this is placing on household budgets," Robertson says.
"We strongly believe only genuine increases in costs should be passed on to Queenslanders through regulated electricity tariffs set by the QCA each year,” he says.
"The QCA draft determination for 2010-11 is for a price rise which is higher than the government considers to be justified.”
According to Robertson, the Government believes the assumptions and modelling used by the QCA in making its draft pricing decision were “flawed”.
He says a comprehensive Queensland Government review has raised concerns about modelling used by the QCA to calculate its Draft Decision on the
Benchmark Retail Cost Index (BRCI) for Electricity: 2010-11.
"In particular, the Government disagrees with the QCA's application of a modelling adjustment factor to calculate energy costs and maintains this should not be taken into consideration in determining the cost of energy component in the BRCI for 2010-11.”
"The Government also considers the QCA's approach to determining retail costs for 2010-11 over-estimated customer acquisition costs and that retail operating costs should be estimated using the same data as used in previous decisions."
The QCA is expected to announce its final 2010-11 price decision by May 31, according to Robertson.
