Are power prices on the way down for Gold Coast businesses?

Anyone who is already involved in industrial leasing on the Gold Coast will know all about the costs associated with running a business, particularly in terms of power bills. The Consumer Price Index from the Australian Bureau of Statistics for March this year showed a 3.9 per cent reduction in the electricity index, which is suggesting lower energy costs. 

While this was for the housing group, moves from the government have perhaps made electricity more financially viable for business owners, and a new announcement sets out to further reinforce the good environment we have at the moment for power costs. 

More relief announced for local business

The Queensland Competition Authority (QCA) has been monitoring retail power prices in the state, and has released its decision on how these will flow in the 2015-2016 financial year. It expects that two large changes over the past 12 months are going to have positive impacts for businesses in the coming year, making electricity more financially viable. 

Professor Roy Green, chair of the QCA outlined the changes that would give electricity cost relief to businesses in an 18 June media release. 

"First, the Queensland government has decided to postpone the deregulation of retail electricity prices in south east Queensland for 12 months. This means our final decision now applies in south east Queensland as well as regional Queensland," he noted. This means those who want to buy commercial property on the Gold Coast are likely to receive great benefits on their power bills. 

The second point was a ruling from the Australian Energy Regulator on poles and wires costs, and how much of a bill these could take up. Overall, business customers in Queensland can expect reductions in their power bills of about 3.5 per cent, or $73 (if they are on tariff 20, according to the QCA).

It isn't much, but it is significantly better than having to pay more on a bill – and could be additional temptation for business owners to expand into commercial real estate for sale on the Gold Coast. 

A break in the bad weather

In a response to this announcement, the Chamber of Commerce and Industry Queensland (CCIQ) welcomed the price relief with open arms. 

"For the first time in recent memory, electricity prices are finally falling for Queensland business customers," said Nick Behrens, director of advocacy at the CCIQ. 

"This is a great outcome for small businesses who have experienced an effective doubling of electricity bills in recent years. A reduction coming their way will no doubt be surprising news but nonetheless is an outcome that will materially benefit their bottom line," he added.

The organisation also notes that businesses on tariff 22 energy rates will see a 1.7 per cent reduction in their bills, which works out to approximately $135 per year. However, there are some costs that those interested in commercial leasing on the Gold Coast do need to be aware of, namely solar feed-in tariffs.

"The QCA acknowledge that the costs of the Solar Bonus Scheme (SBS) continue to have an impact on electricity prices going forward," noted Mr Behrens.

"CCIQ believes the Queensland government should commit to removing the impost of costs associated with the SBS to relieve pressure from consumers subsiding excessive feed-in-tariff rates."

With the idea of switching retailers more popular then ever according to the CCIQ, there are numerous ways in which business owners can financially benefit through their power bills. Of course, to start getting electricity bills, your company likely needs a base of operations. 

That's where Ray White Surfers Paradise can be essential. We have decades of experience pairing people with their ideal commercial real estate – give us a call.