19 December 2012
Judgment handed down on regulated electricity prices in Queensland
Origin Energy Limited (Origin) today noted the outcome of the judicial review by Queensland's Supreme Court in respect of the Queensland Competition Authority's (QCA) regulated retail electricity prices for the 2012-13 financial year.
The Supreme Court upheld the QCA's process for setting prices so no change to the 2012-13 prices will follow. As this was not a merits review, the judgment did not address whether the method used by the QCA to set prices was correct or appropriate.
Origin initiated a judicial review of the QCA's administrative decision as it believed that the QCA failed to take into account the actual costs of producing and supplying electricity, limiting Origin's ability to recover its wholesale costs.
Origin's profit guidance issued to the market on 8 November 2012 had assumed that there would be no change to the QCA's 2012-13 regulated prices.
Origin Managing Director Grant King said, "Origin is determined to seek a transparent framework for setting electricity tariffs with the goal of promoting efficient and competitive energy markets in all states, including Queensland. Those prices should reflect the actual cost of producing and supplying electricity to customers.
"Origin believes that the existing regulatory framework risks the long-term viability and competitiveness of Queensland's electricity sector and will ultimately lessen competition for consumers and stifle future investment in electricity generation.
"Today's outcome brings into greater focus the importance of progress by the Council Of Australian Governments (COAG) on energy market reform.
"We look forward to working with the QCA and the Australian Energy Market Commission which has been tasked by COAG to develop a consistent methodology for regulated retail prices, in particular the wholesale cost of energy. This should be an interim step towards COAG's stated aim of deregulated energy pricing.
"Origin will work with all levels of government to support a sustainable energy market - one which is structured to support investment and ensure a secure, reliable and affordable energy supply well into the future," Mr King said.
Origin will not be appealing today's Supreme Court judgment.
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About Origin Energy
Origin Energy (ASX: ORG) is the leading Australian integrated energy company focused on gas and oil exploration and production, power generation and energy retailing. A member of the S&P/ASX 20 index, the company has around 5,900 employees and is a leading producer of gas in eastern Australia. Origin is Australia's largest energy retailer servicing 4.4 million electricity, natural gas and LPG customer accounts and has the country's largest and one of the most flexible generation portfolios with more than 5,900 MW of capacity, through either owned generation or contracted rights. Origin's strategic positioning and portfolio of assets provide flexibility, stability and significant opportunities for growth across the energy industry. Through Australia Pacific LNG, its incorporated joint venture with ConocoPhillips and Sinopec, Origin is developing one of Australia's largest CSG to LNG projects based on Australia’s largest 2P CSG reserves base.
In New Zealand, Origin is the major shareholder in Contact Energy, the country's leading integrated energy company, operating geothermal, thermal and hydro generation facilities and servicing electricity, gas and LPG customers across both the North and South islands. Origin also operates several oil and gas projects in New Zealand and is one of the largest holders of petroleum exploration acreage in the country.
Origin has a strong focus on ensuring the sustainability of its operations, is the largest green energy retailer in Australia and has significant investments in renewable energy technologies.
For more information go to www.originenergy.com.au.