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Queenslanders warned they face blackouts

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AAP

2012-11-18

Queenslanders have been warned they are heading for electricity blackouts unless a more competitive investment environment is introduced in the state.

The Queensland government has been criticised by its federal counterpart for setting and controlling rising electricity prices through regulation rather than market forces.

Queensland would face greater problems if it did not create an environment that encouraged investment in energy infrastructure, federal Resources and Energy Minister Martin Ferguson said on Sunday.

Retail electricity prices have soared by 60 per cent since 2007 including inflation, but by 80 per cent in NSW.

A toxic political debate has ensued, with coalition governments in NSW and Queensland resisting federal Labor pressure to deregulate and privatise energy assets.

"There are no quick fixes," Mr Ferguson told ABC TV's Inside Business.

"You might think it's smart in the short term to intervene politically in terms of price determinations, in the long term you can end up with greater problems, bigger political problems and I might say, a failure in terms of the electricity system leading to blackouts and shedding.

"In the end you've got to weigh up your policy responsibilities in the short to medium term, not a quick political decision."

Arguably, a controversial contributor to the price rises has been unnecessary over-investment in transmission and distribution assets, or "poles and wires".

Mr Ferguson predicted that would have less of an impact now that a lot of that work had been done.

An energy white paper reform document has called for the use of smart meters and peak load pricing to control use at high demand times, along with price deregulation and privatisation.

Mr Ferguson said on Sunday a ministerial council would develop new rules related to price determination.

Council members would assess "our own capacity as a community to be more conscious of the use of energy, reducing the need for further investment, more accurate information available to consumers about when you should use electricity, with respect to your own personal use, time of day pricing, access to smart metres".

Opponents accuse the federal government of bullying its state counterparts to sell electricity assets to reduce their own funding obligations.

Queensland Premier Campbell Newman has vowed never to sell off vital public electricity infrastructure and the NSW government says it would not do so without an electoral mandate.

There are also suggestions that the renewable energy target scheme will add to prices, which Mr Ferguson said the government was conscious of and would be monitored through regular independent reviews, which were currently led by former Reserve Bank of Australia governor Bernie Fraser.

Greg Roberts