The high value of Queensland electricity poles and wires means higher power bills for Queenslanders.
The high value of Queensland electricity poles and wires means higher power bills for Queenslanders.

Special Queensland power price cuts on the cards

TURNBULL Government MPs negotiating the at-risk National Energy Guarantee want Energy Minister Josh Frydenberg to pay the Palaszczuk Government to devalue its poles and wires to dramatically reduce Queensland power bills.

The push for a specific Queensland plan comes as the Turnbull Government was forced to delay the introduction of its signature energy policy until next week because of a brewing internal fight that could spill into devastating disunity.

Malcolm Turnbull has spent the past two days privately ringing and meeting with MPs who have flagged concerns about how the policy locks in emissions targets but no mandated price decreases.

Maverick National George Christensen.
Maverick National George Christensen.

LNP MPs, including George Christensen, have threatened to cross the floor unless their demands are met.

Mr Christensen wants a near-clean-coal fund, a lower emissions reduction target and to force AGL to keep its coal-fired generator open.

Queenslander Keith Pitt, who is testing his colleagues by repeated threats to quit over the NEG, is understood to be more unhappy about internal National Party politics.

Meantime, Fairfax MP Ted O'Brien, who appears to have taken a swipe at Labor and his own colleagues, is among Queenslanders lobbying Mr Frydenberg to find cash to write down regulated assets in Queensland.

It could cost the Commonwealth billions of dollars.

It is understood Mr Frydenberg has not ruled out the plan, which depending on how much is written down, could significantly reduce Queensland power bills.

Federal Energy Minister Josh Frydenberg.
Federal Energy Minister Josh Frydenberg.

Queenslanders are paying higher prices for their energy bills because of historic gold-plating - over-investment in the network.

Mr O'Brien has seized on findings from the Australian Competition and Consumer Commission that showed Queenslanders were paying too much because of the network costs. The ACCC recommended the Government consider writing down the regulated assets.

"People have had a gutful of cheap partisan politics on this issue, they're screaming out for a unified effort to deliver cheaper electricity prices. Deal time,'' Mr O'Brien said last night.

"Our main aim is to drop power prices for Queenslanders.

"We are looking at everything in the spectrum to make sure we keep that (downward) pressure on.

"Take the writedown of assets, for example. If you follow the money, the value of this idea becomes apparent as network costs like poles and wires are the largest component of electricity bills.

"The Queensland State Government should act on this recommendation and if it's prepared to do so, the Federal Government should consider providing assistance.

"Now that the NEG has passed the Coalition joint party room, it's time we start putting a larger deal together which bundles together the NEG and a mix of ACCC recommendations."

And in an exclusive interview, State Energy Minister Anthony Lynham said Queensland could be open to the cash splash but wanted to see the detail first.

Queensland Energy Minister Anthony Lynham.
Queensland Energy Minister Anthony Lynham.

We've done some preliminary analysis and it's billions of dollars to write down,'' Dr Lynham said.

"I've been in contact with the Federal Energy Minister, saying, 'Well, put your offer on the table. What are you going to offer for Queensland for any regulated asset base writedown before we consider it.

"Now with any regulated asset base writedown and funds diminished from maintenance from your network, there's a risk to go back to those days of lower reliability and I don't think Queensland families would like to see (us go) back to 2004.

"We will consider all options (but) there's other things too. It increases the cost of borrowing because you've got less assets to borrow against."

The high value of Queensland electricity poles and wires means higher power bills for Queenslanders.
The high value of Queensland electricity poles and wires means higher power bills for Queenslanders.

When asked about the plan, Mr Frydenberg said the Government had "a laser like focus on reducing people's power bills".

"The (ACCC) report contains a comprehensive package of 56 recommendations spanning the entire electricity supply chain which the Government is carefully considering."

The ACCC report found that in Queensland, NSW and Tasmania there had been significant over-investment in state-owned networks, "driven primarily by excessive reliability standards and a regulatory regime tilted in favour of network owners at the expense of electricity users. This has enabled networks to recoup billions of dollars of extra revenue from consumers".

"The ACCC is recommending that the governments of Queensland, NSW and Tasmania should take immediate steps to remedy the over-investment of their network businesses in order to improve affordability for consumers. With appropriate assistance from the Australian Government, this can be done."