State-owned transmission giant wants to claw back 45 pct more revenue from customers, citing “increased complexity”

Publicly owned Queensland transmission company Powerlink is seeking to hike the amount of revenue it can recover through customer bills by 45 per cent in the next five years, just as the state LNP government claims credit for pushing down the cost of electricity.

The revenue proposal request for the 2027-32 period is currently being assessed by the Australian Energy Regulator (AER), which earlier this week published an issues paper for public consultation ahead of a decision.

Powerlink says half of the big hike to $5.71 billion is because of a bigger spend on maintaining and upgrading the grid and higher costs of operating it – claims the AER says it will “assess for prudency and efficiency.”

The other 49.3 per cent of the increase is connected to updated forecast inflation and higher regulated rate of return – the amount it pays back to its shareholder, the Queensland government. 

Powerlink says the boosted revenue cap would add another $8 a year to the bills of households with a relatively small annual load of 4,600 kilowatt hours (kWh), starting in 2027. For small businesses using up to 10,000 kWh of electricity a year, it will add an average of $16 to annual bills. 

The transmission company wants to pay just under $1.1 billion over the five years in “regulatory depreciation,” or the amount allocated to paying back investors. That figure is 33.8 per cent higher than in the 2022-27 period because, Powerlink says, its asset base is bigger than it was five years ago. 

More broadly, Powerlink says that its operating environment has become tougher and more costly due to two key factors: system complexity and deliverability.

According to the AER issues paper, Powerlink’s revenue proposal claims the operating envelope – the difference between maximum and minimum demand – of the grid has increased by 60 per cent from 4,834 megawatts (MW) in 2018 to 7,735 MW in 2025.

Meanwhile, rooftop solar uptake continues to boom in the state, resulting in a lower minimum demand on the network.

“Powerlink notes that the respective increase and decrease in maximum and minimum demand is compounded by greater variability and less predictability in demand,” the issues paper says.

And Queenslanders may be on the hook for even more charges, if the pipeline of transmission projects being developed in the state come online during the five years from 2027. 

These include the $1.3 billion Gladstone network upgrade, Copperstring, or the Queensland – New South Wales Interconnector (QNI Connect) project, which Powerlink says may result “in costs being recovered through energy consumers”.

Powerlink says capital spending on replacement assets is the big cost, however, as rising labour and higher material and equipment costs drive up the price of keeping the existing network in good nick.

Costs down, for now

Powerlink’s determination paper, which is currently sitting with the AER, comes as the Queensland LNP government says it is reducing electricity costs for people in the state, despite its efforts to slow renewables and prolong the life of costly and unreliable coal power. 

Last week, state energy minister and treasurer David Janetzki shared that the latest draft regulated price from the Queensland Competition Authority (QCA) – for residential customers outside South East Queensland – was forecasting a power price drop of 9.7 per cent for regional households and 11.3 per cent for small businesses in 2026–27.

This follows the AER’s draft default market offer (DMO) on prices for eastern NEM states and regions which forecasts a price drop of 10.1 per cent for households in south-east Queensland and 12.8 per cent for small businesses next year.

When the DMO offer was announced, AER chair Claire Savage said the reductions are largely due to renewable energy – and specifically more wind and battery storage – joining the national grid. 

Janetzki’s message on the power price cuts for regional Queensland was a little different.

“The results confirm the Crisafulli government’s Energy Roadmap is delivering affordable, reliable and sustainable power for Queenslanders after a decade of skyrocketing power prices under the former Labor Government, including a 19.9 per cent increase in a year.”

An alternate take could be that Queensland is still reaping the benefits of the previous Labor government’s highly supportive and ambitious renewables policies, which rapidly turned the state into a national leader in solar and wind with 8.6 gigawatts (GW) of currently operating wind, solar, hydro and batteries, according to RenewMap.

The state has come so close to matching the 11.8 GW of gas and coal power capacity RenewMap says it currently operating in the state.

But Queensland has dramatically turned away from renewables, focusing instead on propping up old and unreliable coal power and investing in expensive gas. 

The state is dedicating $1.6 billion to propping up coal power and just $400 million for renewables, storage and gas, under the Energy Roadmap Amendment Act 2025.

Unfortunately for the Crisafulli government, coal and gas are responsible for setting high wholesale market prices. Data reported in Renew Economy last year shows that when renewables supply more than half of the grid’s needs, prices fall below $100 a megawatt hour (MWh).

Janetzki blamed the previous government’s lack of maintenance of dicky coal power stations for high power prices, but the biggest coal shutdown in the state – the 2021 explosion at Callide C – was found to result from “significant weaknesses in CS Energy’s technical controls, operational systems, and leadership oversight”.

And while Queensland’s coal fleet is the youngest in the nation, they are also the most unreliable. 

Reliability Watch data shows that in the twelve months to 30 November 2025, Queensland’s coal power stations were offline for 23 per cent of the year, equivalent to every unit being offline for 86 out of the 366 days.

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