Buying the election in QueenslandELECTRICITY pricing is a complex business but it is clear the cost of irrigation is about to skyrocket. The Queensland Competition Authority (QCA) has just completed a round of regional information meetings in Ayr, Bundaberg, Cairns, Emerald, Gatton, Mackay, Mareeba and Townsville to explain the draft electricity pricing for 2013-14.

Irrigators at the Bundaberg meeting were frustrated and concerned about the apparent lack of influence they have in challenging the imminent price hike, which one cane grower suggested would shut down our industry.

The Electricity Act demands that electricity pricing be cost-reflective and so the electricity distribution companies, government-owned Ergon and Energex, provide their cost estimates and the QCA must determine pricing that covers these costs.

QCE use a Network (N) plus Retail (R) pricing model, where the network costs are previously determined by the Australian Energy Regulator.

With 75 percent of the expected price rise due to increases in the network cost, QCA does not have much room to move.

In the Draft Determinations report the large increase in electricity price are said to be due to increases in the underlying costs of supply, which are predominately driven by increases in network charges.

The draft indicates that energy costs are the next biggest cost driver and are estimated to increase by around 9pc due to uncertainty in the wholesale energy market, and a tightening of supply in the wholesale energy market.

A round of consultations and submissions late last year saw the QCA increase their recommendation for the transition time of most transitional and obsolete tariffs to cost-reflective pricing from one year to seven years. This was done in response to industrys successful argument that businesses needed time to earn a reasonable return on investment for infrastructure purchased to comply with these tariff requirements.

QCA is accepting submissions on the draft recommendations until March 22 before the release of the Final Determination on 31 May, which takes effect on July 1.

Post your submission to Queensland Competition Authority, GPO Box 2257, Brisbane QLD 4001 or email it to electricity