A draft determination has been made on electricity prices for Queensland energy users for 2014-2015 which will ratchet up the pressure on the costs of production for primary producers, according to the Queensland Farmers’ Federation (QFF) and Cotton Australia.
QFF CEO Dan Galligan says the Queensland Competition Authority’s (QCA) draft determination will push many of the tariffs used by farmers up by about 15 percent next financial year. Cotton Australia is a member of the QFF.
“This follows a 10% rise for this financial year. Although the State Government capped this financial year’s rise at 10% from the original proposal of 20%, these consecutive large rises will greatly reduce the profitability and competitiveness for many farmers under the QFF membership,” Mr Galligan says.
“Some farmers have faced a 350% increase in electricity costs since 2000, and further rises will exert extreme pressure on the State’s agricultural industries, which already operate in a very high cost environment with small and volatile profit margins."
“The dry spring and summer has meant farmers have been heavily reliant on electricity for irrigation, and electricity bills in the tens of thousands of dollars are arriving in their mailboxes. The thought of another 15% rise on top of those bills would be a serious threat to farm profitability.”
Mr Galligan says the QCA’s draft determination would also grant farmers a tariff reprieve if the carbon tax was abolished, with the predicted rises to drop to 10%.
The QFF and its members are working with the State Government, the QCA, and Ergon on mitigating the impacts of rising electricity costs.
Cotton Australia will also be providing a full response to the QCA's draft determination, and is working with Ergon to ensure growers have access to appropriate structures.
Michael Murray, Cotton Australia's Policy Manager for Queensland and Water, says the organisation will continue to lobby both the Federal and State Governments for electricity market report, and recently joined the Energy Users Association of Australia (EUAA) to strengthen its policy and lobbying capacity in the energy sector. It is also supporting a number of growers seeking Federal Government assistance to trial alternative energy sources.