ERGON gaming regional Queensland for record profits

ASMC10 October 2014 

A new report examining the out of control electricity price increases in regional
Queensland identifies Ergon’s extraordinary profit model as the leading cause.

Commissioned by CANEGROWERS and the Australian Sugar Milling Council (ASMC), the report examines why farmers are increasingly unable to afford to irrigate their crops in regional Queensland, and why energy users like sugar mills are paying 48% more for network use than the average Ergon energy user – that’s substantially higher than any other comparative energy user on the National Electricity Market.

Dominic Nolan, CEO of ASMC said “The sugar industry is really at a loss to understand how Ergon can justify record profit making, when our farmers can’t afford to turn on the tap and make a basic living. And it’s not just our industry, this story is repeated across the agriculture sector in Queensland.”

Mr Nolan added “Huge price increases are unsustainable for rural and regional businesses. While the sugar industry is seeing some improvement in its 2014 production, it could have been much better if farmers could afford to fully irrigate their crops. Sugar mills are facing a further minimum doubling of network charges under the QCA transition tariffs -and that’s before QCA’s latest price determination process reviews these prices upwards again.

Our report clearly demonstrates that the current Ergon tariff structure is neither equitable nor sustainable – and therefore the QCA approach to retail pricing, which is based on these tariffs, is not equitable. A real review of Ergon network pricing is critical to the viability of Queensland agriculture – and the basic long term cost of living for all regional Queenslanders. Regional Queensland is rapidly becoming uneconomic for agriculture and its associated processors.

Mr Nolan says that in addition to urgent reform, which might take some time to consider and implement, “ Farmers and their processors need price relief now. Record profits for Ergon won’t build the future of Queensland. Unless we enable farmers and large industry, like sugar mills, to get on with their business, we’re shutting down the future of Queensland.”

Australian Sugar Milling Council – 10 October 2014
For further information contact Dominic Nolan CEO – 07 32315000, Mob. 0419287734