Household and business electricity bills will jump in regional Queensland for the first time in three years on the back of high demand, plant outages and higher coal and gas prices.
The Queensland Competition Authority has allowed retailers outside the suburban southeast to lift typical residential electricity bills by $119 to $1290 and business bills by $215 to $2334 in 2022/23.
Last week the Australian Energy Regulator approved a hike in residential power bills in the state's southeast by $165 and $220, to between $1620 and $1961, and business bills by $705 to $1620 in the coming financial year.
A one-off state government rebate of $175 announced last week is likely to shield most households from bill shock, but businesses will bear the cost.
QCA chair Professor Flavio Menezes says rising energy costs are pushing up prices for generators so retail bills must rise for the first time since 2018/19.
"This follows several years of falling energy costs, which were a driver of price decreases for each of the last three years," Professor Menezes said in a statement.
"Energy costs are projected to increase due to factors that include significant episodes of high demand, reduced generation availability from coal-fired and gas-powered power plants and higher coal and gas prices, which have been impacted by the war in Ukraine and sanctions against Russia."
The QCA determination said higher wholesale prices were caused by heatwaves, high demand, reduced generation availability, higher fuel prices and coal-fired generators lifting their prices.
Demand rose sharply during record heatwaves in northern and central Queensland in March, as unplanned gas and coal-fired power plant outages had reduced electricity supply.
Meanwhile, higher international coal and gas prices due to the war in Ukraine have lifted costs for generators.
The determination said coal-fired generators also raised offer prices above $60 per megawatt hour, which was locking in higher wholesale spot prices across Queensland.
"Coal and gas-fired generators set spot prices around 70 per cent of the time," the QCA said.
"This spot price setting dynamic, coupled with higher gas and coal prices, has contributed to elevated spot prices and ASX contract prices."
The regulator said spot prices were between $155 MWh and $194 MWh in the first quarter of 2022, compared to $42 MWh and $49 MWh in the same period of 2021.
"Not only have average spot prices remained elevated since the draft determination, but there has also been a significant number of high price events (spot prices exceeding $300/MWh)," the QCA added.
"The AER reported and investigated 12 cases of 30-minute wholesale electricity prices that breached $5000/MWh in Q1 2022, compared to zero breaches in Q1 2021."
