“Community service obligation” to keep power prices reasonable

THE Queensland Government will have forked out $1.32 billion over three years in an effort to keep power costs down for regional towns.

Treasurer Tim Nicholls said a review of electricity supply deals with Ergon Energy showed the power retailer should now use electricity created by government-owned generators Stanwell and CS Energy.

Both have been previously earmarked for possible privatisation under wide-ranging plans to reduce Queensland's debt.

A decision on the sale of Stanwell and CS Energy is not expected to be made until after the next state election in 2015.

Mr Nicholls said there was a "community service obligation" in place with both generators to keep electricity at a reasonable price for those outside Brisbane.

"In 2012-13, the cost of the (obligation) is budgeted to be $620 million and, in 2014-15, this cost is estimated to increase to more than $700 million," he said.

"This is a significant cost to the state and, to help offset this, the government is committed to improving the efficiency of its energy portfolio wherever possible."


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