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Minister Stephen Robertson can, but won't, veto Queensland power hike

BrisbaneTimes.com.au

Queensland Energy Minister Stephen Robertson says he will not act to reduce a 13 per cent rise in electricity prices, despite having the power to overrule the record hike.

The rise will push the average quarterly electricity bill up by nearly $50, to $397.

The hike was approved by the Queensland Competition Authority, which yesterday ruled the price rise was necessary to balance "customer acquisition and retention costs" for electricity retailers.

An initial 9 per cent price rise was approved by the Australian Energy Regulator, which in May signed off on more than $12 billion for infrastructure works plans for the two state-owned electricity providers over the next five years.

The QCA decided the additional cost of supplying power should see prices rise 13.29 per cent.

The price rise will account for a 17 per cent increase in transmission and distribution costs, according to the QCA.

It has estimated that retail operating costs will also increase to $83.19 per customer next financial year.

Mr Robertson told reporters he was disappointed in the decision by the QCA.

"Our government knows the huge impact that electricity price hikes will have on the average household," he said.

"Many people in our community are doing it tough and the price increase announced by the independent QCA today will place additional strain on their weekly budget."

Despite declaring his disappointment, Mr Robertson said he would not exercise his power to veto the decision.

"If I were to intervene and reduce these prices then it would mean a reduction in investment in our electricity system," he said.

"We would return to the days of blackouts and brownouts - an unreliable electricity system that caused so much angst and anger in the early part of this decade.

"I know that a 13.3 per cent increase in electricity bills will hurt average Queenslanders.

"But if this is what is needed to ensure that we have a reliable electricity system in this state then that is what is behind QCA's decision."

Mr Robertson rebuffed suggestions the deregulation of the state's electricity industry in mid-2007 had driven a 40 per cent rise in costs over the past four years.

"It was never said that deregulation would decrease electricity bills," he said.

"We said it would moderate future increases, by having a retail sector that was run more efficiently."

Queensland Council of Social Service president Karyn Walsh said electricity concessions should be reviewed in order to held those most vulnerable in society.

"We know the government is looking at the possibility of health-related energy rebates in the coming budget but we'd like them to go further than that," she said.

"It is no coincidence that Queensland consistently has one of the highest disconnection rates in Australia.

"Current concessions are simply not hitting the mark and need to be extended to all people currently unemployed, and not just those with pensioner concession cards."