Warning on power pain

ELECTRICITY prices in Tasmania look set to surge over the next year, with some businesses already dealing with contracts that have doubled in price on last year.

There are fears the hike may prove disastrous to high-energy on-farm operations.

Last week, the Royal Agricultural Society of Tasmania reported an astronomical power price rise, having been offered a 12-month contract with an increase of 105 per cent on the current cost.

A two-year contract equated to a 91 per cent increase and a three-year contract an 80 per cent hike.

“This is rampant inflation and a failure of policy,” said RAST chief executive officer Scott Gadd.

“For many companies, power price rises of this order will be impossible to absorb and companies will need to pass on the costs to customers or risk the future of their businesses.”

The power contracts offered to RAST may well be a sign of things to come and many Tasmanian farmers in run power-hungry operations.

In June this year, Tasmanian Country reported the low-voltage irrigation network tariff TAS75 would see increases from July 1, 2023.

Under the TAS75 tariff for 2021-2022 schedule, Aurora’s prices involved supply charges of 255.628c/day on top of shoulder rates of 20.23c/kWh, peak rates of 27.781c/kWh and off-peak costs of 12.642c/kWh.

Currently daily supply charge is 285.996c/day, with a shoulder rate of 22.634c/kWh, peak 31.081c/kWh and off-peak at 14.143c/kWh.

The increase in the TAS75 Tariff is 11.8 per cent.

Minister for Energy and Renewables Guy Barnett said cost pressures could be alleviated through a $50 million loan scheme offered to help commercial and industrial customers improve energy efficiency.

“We know cost pressures are having an impact on Tasmanian businesses and that’s why we are engaging with businesses and industry groups closely on this matter,” Mr Barnett said.

Commercial and industrial customers with energy consumption of over 150 MWh per year would be eligible under the scheme, while businesses with consumption below that threshold are already eligible for existing schemes.

“We want this new scheme to make a real difference to the way businesses, including farms, run their operations to result in long-term savings,” Mr Barnett said.

Tasmanian Farmers and Graziers Association chief executive Hugh Christie said the increases being experienced by RAST reflected the challenges facing the Tasmanian agricultural sector and the broader community.

“For our members the concern is broader than just what is going to happen to their power bills, but the impact on the supply chain pre and post-farm gate, Mr Christie said.

“This will see our members being squeezed by both sides as our suppliers seek to cover their costs and processors dealing with their own energy costs putting downward pressure on prices.

“We are calling on the Government to recommit to initiatives such as the energy efficiency audits through the 2023 budget.