The Queensland Competition Authority has allowed retailers outside the suburban southeast to lift typical residential electricity bills by $119 to $1290 and business bills by $215 to $2334 in 2022/23.
The decision comes after the Australian Energy Regulator last week said residential bills in the suburban southeast could rise by $165 and $220, to between $1620 and $1961, and business bills could be lifted by $705 to $3446 next financial year.
QCA chair Professor Flavio Menezes says rising energy costs are pushing up prices for generators, so retail bills must increase in the regions for the first time since 2018/19.
"This follows several years of falling energy costs, which were a driver of price decreases for each of the last three years," Professor Menezes said in a statement.
Premier Annastacia Palaszczuk said a one-off $175 rebate would cushion many households, but she ruled out capping electricity prices.
"We don't work in that system," she told reporters.
"So unfortunately we are guided by what's happening around the world that's having an impact."
The QCA determination said higher electricity bills come on the back of surging wholesale prices due to heatwaves, increased demand, reduced generation availability, higher fuel prices and coal-fired generators lifting their prices.
Demand rose sharply during record heatwaves in northern and central Queensland in March, while unplanned coal and gas-fired power plant outages had reduced supply.
Meanwhile, higher international coal and gas prices have lifted fuel costs for generators.
The determination said coal-fired generators also raised offer prices above $60 per megawatt hour, which was locking in higher prices across Queensland.
"Coal and gas-fired generators set spot prices around 70 per cent of the time," the QCA said.Â
"This spot price setting dynamic, coupled with higher gas and coal prices, has contributed to elevated spot prices and ASX contract prices."
The regulator said wholesale spot prices were between $155 MWh and $194 MWh in the first quarter of 2022, compared to $42 MWh and $49 MWh in the same period of 2021.
"Not only have average spot prices remained elevated since the draft determination, but there has also been a significant number of high price events (spot prices exceeding $300/MWh)," the QCA added.
The Queensland Conservation Council said the dependency on coal generation and failing to invest in enough renewable generation and battery storage had resulted in prices going from the lowest in the nation in 2017 to the highest in 2022/23.
"Other states are already seeing renewable energy bring down prices, while Queensland cops higher prices than ever and increasingly unreliable coal-fired power stations," QCC analyst Clare Silcock said.
Solar Citizens deputy director Stephanie Grey said short-term solutions like rebates were only kicking the can down the road.
She said the state's 10-year energy transition plan, due in September, needed make Queensland catch up with other states on clean energy.
"Queenslanders can't afford to be paying for expensive fossil fuels when the other states have got on with the transition," Ms Grey said.
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