'Model encourages power retailers to offer the best price'

POWER prices may still increase under new reforms by the Queensland Government, but not so fast.

Energy Minister Mark McArdle released plans on Monday to remove the maximum power price scheme from July 1, 2015.

This price is currently set by the Queensland Competition Authority for south-east Queensland - including Sunshine and Gold coasts, Gympie, Ipswich and Gatton - then power retailers offer some discount on that, usually up to 13%.

By dumping this limit on prices, the government expects competitors to fight harder for customers by undercutting each other.

They will no longer rely on the QCA to tell them how much they are allowed to charge.

"This system is currently used in Victoria and South Australia and allows consumers to compare prices and shop around," Mr McArdle said.

"This model encourages electricity retailers to offer the best price because they are aware that customers can compare prices and change if they find a better option."

QCA chairman Malcolm Roberts said that in Victoria and South Australia prices went up after the removal of this electricity limit, but said they did not go up as fast as they had in Queensland.

"If you remove government regulation and the uncertainty that comes with it, you'll create an atmosphere of competition," he said.

The QCA would also keep a close eye on the prices - as they have with water - to ensure that companies are being reasonable.

These power reforms come a day after Mr McArdle flagged the government proposed to lump Energex and regional provider Ergon under the same banner to save costs.

Such a plan would be expected to cut costs at the head office level by reducing the need for two entirely separate workforces running similar operations.

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