Tackling rising electricity costs: how councils can save more in 2025

Published on 03 July 2025

By Mike Fideli, Energy Advisory Leader 

Electricity prices in Queensland are expected to increase between 1.8% and 3.2% for business customers and around 3.8% for residential customers during the financial year 2025-26, compared to FY 2024-25. The increases vary by network areas, and it isn’t just inflation-driven - it’s compounded by domestic energy shortages, supply chain disruptions, and the retirement of several coal-fired power stations.

With electricity remaining one of the single largest expenses - costing Queensland Councils over $250 million annually - finding ways to reduce costs is more urgent than ever.

Three ways to save on electricity costs

Significant savings are available through:

1. Group Procurement: Use our Local Buy Electricity Arrangement and group procurement service to benefit from the buying power of aggregate usage across councils and not-for-profits to negotiate better rates.
2. Tariff Analysis: Ensuring each site is on the most cost-effective retail and network tariffs.
3. Renewable Energy: Installation of behind the meter renewable energy (i.e. Solar PV).

1. Group Benefit: Local Buy’s Electricity Arrangement

Launched in 2008, Local Buy's Electricity Arrangement (LGA Arrangement) was designed to deliver savings via managed group procurements. What started with just 8 councils now supports, via the existing Arrangement, 18 councils and 4 not-for-profit organisations as of 2025—and the number keeps growing.

A similar managed group procurement approach for large sites and street lights, conducted in March, 2025 secured rates that are estimated to save councils more than $12.6 million over the coming 3 years. This is comprised of $7.2 million electricity cost savings for larges sites and $5.4 million for street lights. These savings are significant for participating councils and made possible by this Local Buy service.

Some councils can still participate in the benefits obtained under these contracts. If you would like to explore options, please reach out to us to discuss.

Electricity Arrangement Refresh

The current Local Buy Electricity Arrangement (BUS275) is a Register of Pre-Qualified Suppliers (RPQS) catering for a diverse range of Retail Energy Services to assist councils and NFPs in managing their individual energy requirements. This Arrangement will expire in November 2025 and will be replaced by a new Local Buy Energy Arrangement (LB333) to provide Buyers in Queensland with continued easy access to goods or associated services which enable streamlined procurement processes.

In addition to pre-qualifying suppliers for standard electricity for large sites, small sites and street lights as per BUS275, the new Energy Arrangement will also include suppliers with capabilities to provide Renewable Energy Power Purchase Agreements (PPA) and Bulk Gas. The initial term of this “new” Local Buy Arrangement is three (3) years and a further four (4) by three (3) year extensions. The commencement date will be on the 1st of December 2025.

On the establishment of this new Energy Arrangement, Local Buy will also establish an Energy Stakeholder Group to further explore Renewable Energy Power Purchase Agreements as a future option to include under our group procurement initiative. Further news on this stakeholder group will be released in the coming months. If you are interested in being part of the group, please contact mfideli@localbuy.net.au                                                 

2. Tariff Analysis

Ensuring that your sites are on the right tariff is a simple way to save money. A tariff analysis needs to include all bill components: retail rates, network charges, metering costs, and loss factors and done at the start of each financial year to uncover additional opportunities.

Peak Services' energy team has reviewed over 10,000 electricity accounts on behalf of over 30 councils and found thousands of examples of sites on the incorrect tariff. The result? More than $10.3 million saved - simply by aligning sites with the best-fit tariff options based on hourly consumption data and demand profiles.

3. Energy Audits & Solar Feasibility

Councils can also reduce grid power cost long term through:

• Energy Audits
• Behind-the-Meter (BTM) Renewable Energy (like Solar PV)

Solar feasibility studies are the first crucial step – evaluating electrical infrastructure, land suitability, cost/benefit, and site-specific constraints, ensuring councils are ready before committing capital investment. These business case reports also play a key role in helping councils to secure grant funding for the specific projects. 

Behind the meter (BTM) refers to energy systems or technologies that are located on the consumer's side of the utility meter—meaning they directly serve the energy needs of the property or facility without first passing through the utility grid. Since this power does not pass through the utility infrastructures, businesses avoid extra charges like transmission and distribution fees.

Examples of BTM technologies:

• Solar panels installed on rooftops
• Battery storage systems
• Energy management systems

These systems generate, store, or manage energy on-site, often reducing grid reliance.

Here are several key benefits:

1. Cost Savings

• Councils can reduce electricity bills by generating their own power (e.g. solar).
• Avoid peak-time charges by using stored energy from batteries.

2. Energy Independence

• Less reliance on the grid means greater control over energy use.
• Useful during outages or grid instability.

3. Environmental Benefits

• Promotes clean energy adoption (e.g., solar, wind).
• Reduces carbon footprint and supports sustainability goals.

4. Grid Relief

• Helps reduce demand on the central grid, especially during peak times.
• Can improve overall grid stability and reduce the need for infrastructure upgrades.

Ready to Explore Cost-Saving Solutions?

With the right data, partners, and procurement strategy, your council can unlock major energy savings and take greater control over future costs. Local Buy and the Peak Services Energy teams are here to help councils do exactly that - with proven results and sector-wide support.