Strong population and housing growth is placing increasing demands on the Queensland electricity network, resulting in the need for increased network investment that will ultimately flow on to consumers and businesses in the form of higher electricity tariffs. Our growing appetite for energy guzzling appliances such as air conditioners and plasma TVs is also contributing to the strain.

Yesterday the Australian Energy Regulator (AER) highlighted these issues when it approved significant increases to capital expenditure programmes for Energex and Ergon Energy. Energex operates South-east Queensland’s electricity distribution network, whilst Ergon operates the power network in regional and rural Qld.

For Energex, the AER has approved capital expenditure of $6.4 billion over the five years starting 1 July 2010. Ergon Energy has received approval for capital expenditure of $5.6 billion over the next 5 years.

According to the AER, these capital expenditure programmes will result in network charges for Energex’s customers rising by an average of 17 per cent in 2010-11, followed by 6.8 per cent per year over the following 4 years. For Ergon Energy’s customers, network charges would increase by 29 per cent in 2010-11 followed by 4.6 per cent in the subsequent 4 years.

The increase in network charges will be incorporated by your power company into their retail electricity tariffs from 1 July 2010 onwards.