Electricity price to rise under renewable energy plan

Archived News, Posted on 04 Jan 2010

HOUSEHOLDS are facing yet another rise in electricity prices and will have to wait a year longer than businesses to get compensation.

Climate Change Minister Penny Wong yesterday revealed interim assistance for big polluters that use a lot of electricity.

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And while aluminium smelters, silicon production and newsprint manufacturing will not have to meet 90 per cent of their obligations under the Rudd Government's renewable energy target (RET), households may not get off so easy.

The RET will start next year and will eventually require big polluters to source 20 per cent of renewable energy by 2020.

Renewable energy is expensive and the Government is predicting there will be pass-on costs to households, albeit only 4 per cent. For the typical household, it could be about $84 extra a year.

But the Government does not believe the rise will warrant the need for household compensation.

Despite the single-digit rise, Queenslanders are already seeing red over soaring electricity prices.

The Courier-Mail recently revealed that the typical Queensland household now pays more for electricity than council rates and next year prices are expected to surge past $2100 a year.

The RET was linked to the Carbon Pollution Reduction Scheme, which was defeated last week in the Senate.

The CPRS, which was to start in 2010 but is now delayed to 2011, will also increase electricity prices – about $200 a year – but the Government will compensate low-to-middle income households up to 120 per cent. But that compensation will not kick in until 2011.

Senator Wong said the provisions for big polluters had been put in place "to safeguard against the Opposition voting against the CPRS again".

She said the assistance would not be drawn upon if the Coalition passed the CPRS in November.

Opposition Leader Malcolm Turnbull championed the Government's backflip as a "victory for common sense".

Meanwhile, the RET is scheduled to be voted on this week.

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