It is a reversal of policy for the Authority as only as recently as last December in a draft report it recommended a lower investment figure. The funding is capped at $4.7 billion for Energex and $4.46 billion for Ergon.

Energex CEO Gordon Jardine described the decision as a major improvement on the draft decision and said the decision would support the record levels of capital investment and maintenance needed to meet the challenges in the fastest growing part of Australia.

Minister for energy John Mickel said the funding should keep Queensland’s electricity network reliable until 2010.

Last year’s Somerville report, which predicted widespread blackouts due to years of neglect of the state’s networks, is credited as being an influence in the Authority’s upgraded recommendation.

However the Authority issued a warning saying the funding requests were unprecedented and left the two companies facing ‘new and unfamiliar obligations.’

The Authority’s decision is said to put pressure on the regulators in other states, a number of which are either currently under review or in a similar unreliable condition.

WA’s Western Power network has been accused of causing the deaths of two women due to its neglected state while Victoria is undergoing a review of its power infrastructure. SA’s ETSA Utilities is seeking to have that state’s regulator increase its rate of return.

Energy Networks Association chief executive Bill Nagle said he was disappointed that the QCA was allowing a weighted average cost of capital (WACC) of 8.5% when it had allowed a WACC of 9.02% for the bottlenecked Dalrymple Bay port which urgently needs an infrastructure investment and upgrade.

Australia’s electricity market is tipped to be growing at about 2.3% per year and $30 billion worth of investment is needed to keep pace with the projected demand.