Queensland electricity users hit with $51m in natural disaster costs

Three recent natural disasters will directly cost Queensland electricity users $51.4 million over the next two years.

The per connected customer charge will be minimal, at $2 for residential customers and $4 to $5 for small business customers over two years, and about the same for Ergon Energy’s customers, due to government fee uniformity rules.

But the size of the approved pass-through costs point to a future where customers will be shouldering a higher burden from the rising ferocity of natural disasters.

Pass-through costs are a time-limited way for the AER to regulated monopolies such as electricity networks to recover costs when hit with events outside their control – such as natural disasters.

The AER approved slightly higher costs than both of the state-owned distribution network service providers (DNSP) asked for, to factor in ongoing construction inflation and the time penalty between fixing infrastructure and being paid for that.

The only other time the Australian Energy Regulator (AER) has approved a cost-pass through in Queensland from a natural disaster was last year.

Energex was allowed to charge customers $18.1 million in 2024-25 to pay for the damage created by the 2022 floods in the state’s southeast.

Disaster costs set to continue rising

But the disasters didn’t stop coming, and data indicates that fires and cyclones are getting more frequent and worse.

“Since the early 2000s, the Queensland Fire Department has noted an increase in the frequency, severity, size and property damage of bushfires in Queensland that culminated in the unprecedented 2023 fire season,” a Climate Council report from 2024 noted. 

Warming oceans are fuelling more violent cyclones, which the report attributed some of the $357 million worth of damage from Cyclone Jasper and $1.33 billion in damage from Cyclone Kirrily to. 

“More severe tropical cyclones and storms have decimated Queensland’s coasts and communities over the past 12 months, fuelled by a warmer ocean and wetter atmosphere,” the report said.

Between 2020 and 2060, the total cost of natural disasters in Queensland is expected to reach $530 billion.

Cost to Queenslanders in millions

Some of this tab will be directly picked up by the electricity users who live through those events, as is happening for the south east Queensland storms during December 2023 and January 2024, Cyclone Jasper in 2023 and Cyclone Kirrily in 2024. 

Energex is the state-owned network covering the south east of Queensland and has about 1.6 million residential and business customers. 

Ergon looks after the rest of the state and has 790,000 customers. 

For the next round of cyclone damage, the AER gave Energex permission to recoup $11.5 million from its customers to pay for wrecked concrete poles, transformers, and power lines in Brisbane, Gold Coast, Logan, and Scenic Rim areas.

For Ergon, the regulator decided Cyclone Jasper would cost a total of $24.6 million and Cyclone Kirrily would come in at $15.3 million.

“Cyclone Jasper… caused significant damage to Ergon Energy’s distribution network… with the most severe impacts occurring in the Wujal Wujal and Yarrabah Aboriginal Shire Councils. Approximately 50,000 customers lost electricity,” the AER said.

“Cyclone Kirrily… brought down powerlines, with the most severe impacts occurring in the Local Government Areas of Townsville City, Burdekin Shire, and Charters Towers Regional. Approximately 60,000 customers lost electricity.”