Brisbane, Australia --- (METERING.COM) --- December 3, 2009  - The current regulated tariffs in Queensland are not structured to reflect the major cause or drivers of the costs of supplying electricity to customers and retail tariffs should be aligned with network tariffs and should be made as cost reflective as possible.

In addition a seasonal tariff option independent of network options possibly could be included, while voluntary time-of-use tariff should be introduced for residential customers – currently just over 200,000 – with interval meters.

These are among recommendations from the Queensland Competition Authority, following a review of the state’s electricity pricing and tariff structures.

Further the Authority recommends that a new set of cost reflective tariffs should be developed, rather than seeking to amend the existing tariff structure. However, should the government choose to retain the existing tariff schedule, a number of existing tariffs should be removed and/or consolidated and prices rebased to reflect costs.

The Authority also notes that tariffs should be simple and logical for customers to understand. Complex tariff structures may better reflect costs than do simple tariffs but they may also create confusion among customers and cloud the price signals to which it is hoped they will react.

The Authority says that undoubtedly there will be winners and losers from the proposed changes. However, the Authority consider that all customers will be best served by a well  functioning competitive electricity market. The key to achieving this in a sustainable way is to ensure that prices reflect costs and the manner in which those costs are incurred. Furthermore, any welfare considerations for vulnerable customers are best handled via a targeted approach by government and not via general tariff adjustments.

The Authority’s report is now being considered by the Queensland state government.