NT businesses facing hefty increases in power costs

Cash strapped Northern Territory businesses are facing the prospects of another cruel blow with the cost of their power set to get a hefty increase from July 1.

PowerWater electricity infrastructure and power lines at sunset.

Cash strapped Northern Territory businesses are facing the prospects of another cruel blow with the cost of their power set to get a hefty increase from July 1.

It has been predicted that Territory Generation changes to the wholesale power price agreements it has, will force up the cost of power for some Territory tranche 4 businesses from between $20,000 to $50,000 a year, while some larger customers could face increases of between $500,000 to $1 million a year.

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Any increases in the price of wholesale power by Territory Government utility T-Gen is almost immediately passed on to customers.

Business sources say the likely wholesale increase in energy costs looks to be between five and 20 per cent, with a significant proportion of businesses at the higher end of the increase.

Affected Territory businesses have responded with shock at the prospects of massive hikes in their power bills and subsequent business costs.

Treasurer Nicole Manison did not deny the increase was on the way. Picture: Keri Megelus

“For some it could mean the end of the line,” said one Darwin business. “Certainly is not something my business has budgeted for.

“Massive increases like this to a business’ bottom line costs jobs, which is the last thing the Territory needs right now.

“The Government says it s number one priorities are creating jobs trying to grow the Territory’s population and attracting new business to the Territory.

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“Well this will do none of that. Electricity is a significant cost for almost every business.”

Treasurer Nicole Manison, who is the shareholding Minister did not deny the increase was on the way.

“Large commercial customers (approximately 120) over 750MWh are not regulated by government and are free to negotiate an electricity supply contract with any licenced retailer in the Territory,” Ms Manison said.

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The tariffs charged by retailers to large commercial customers are negotiated individually and vary each year in line with the actual cost of generating and transporting electricity.

“If a commercial customer is not happy with prices being offered by their retailer they can approach other retailers.

“Government is currently consulting on electricity market design to ensure prices remain affordable and electricity supply is reliable.”

Ms Manison said electricity prices for households and small business are regulated by government and are capped at CPI increases.

“This saves Territory families around $1200 per year on their power bills,” she said “This was an election promise.”