Australian Energy Regulator finds $200M undue bills by QLD Government

A recent report by the Australian Energy Regulator confirms the suspicions of the consumers regarding the $200 million extra charges added to their electricity bills by the Queensland Government. The Coalition Government of Queensland was quick to put the blame on green energy schemes especially solar, and carbon tax for the increasing prices of electricity bills, but it seems that Government-owned generators are the real culprit.

In its annual state of the energy market report, the Australian Energy Regulator revealed that bidding strategies of Government-owned generators, especially CS Energy, pushed wholesale prices far above they were supposed to be last summer.

Australian Energy Regulator indicates culprit

That effectively added a huge $200 million of revenue to the state-owned companies.

The report of the Australian Energy Regulator stated that over the summer of 2013 to 2014, the average spot prices in Queensland were higher than those in New South Wales by about 14 per cent. This happened after prices were lower for a number of years.

The Australian Energy Regulator report said that this was due to the volatility of the Queensland energy market, which was caused by the faulty bidding practices of the state-owned generators.

“The rebidding strategies of some Queensland generators caused this volatility. Generators rebid capacity from lower to higher price bands during each affected trading interval,” stated the Australian Energy Regulator.

 Market volatility from state-owned generators main cause according to report

“Demand and generation plant availability were within forecasts on each occasion, and pre-dispatch forecasts did not predict the price spikes,” the report continued.

“Most rebids occurred late in the 30 minute trading interval and applied for very short periods of time (usually five to 10 minutes), allowing other participants little, if any, time to make a competitive response,” the report added.

The report pinpointed CS Energy, a government-owned generator as the most active player which rebidded capacity into high price bands (above $10,000 per MWh, near to dispatch).

By the end of the summer, other generators followed suit and rebidded capacity from low to high prices, effectively resulting in the frequent spike in consumer electricity bills.

“The behaviour compromised the efficiency of dispatch, causing prices to spike independently of underlying supply–demand conditions,” stated the Australian Energy Regulator.

During the summer of 2013 to 2014, the average Queensland price was $68.77 per MWh. If there were no short-term spikes, it would have been lower by 18 per cent or around $56.10 per MWh.

“The increase represents a wealth transfer of almost $200 million based on energy traded. More generally, spot price volatility puts upward pressure on forward contract prices, which ultimately flows through to consumers’ energy bills,” the Australian Energy Regulator explained.

CME report shows this isn’t the first time energy consumers have been duped

This is not the first time that the Queensland Government-owned companies were caught pocketing huge sums of money taken surreptitiously from unsuspecting consumers.

A report by CME, a Melbourne-based consultancy, prepared for the Queensland Cane-Growers Association, exposed the State Government pocketing receipts from its network operators, which doubled each year from $47 million in 2007 to 2008 to $970 million in 2011 to 2012, out of the pockets of unwary consumers.

There is more than enough reason for consumers to be enraged, since they were duped again by their own Government.

The Author

Motivated and dynamic journalist with a strong interest in sustainable solar powered technology. My work in journalism and new media has provided me with a medium to produce content concerning emerging renewable energy.

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