Allan Reinikka

Ergon and Energex merged after late night Parliament vote

QUEENSLAND'S two power providers will be merged into one after legislation passed state parliament on Wednesday.

Ergon and Energex will become Energy Queensland from July 1.

The Queensland Government said the merger would minimise costs and provide better services to regional and rural Queensland.

Energy Minister Mark Bailey said removing duplicated areas including administration and management would save taxpayer money.

"Through the merger and improved efficiencies, the savings will be passed onto customers. The merger will create a larger, more diverse business," he said.

But the Opposition fought against the merger claiming a spin off of energy services will compete against independent electricians.

Speaking in parliament on Wednesday night shadow treasurer Scott Emerson said the deal was at the behest of unions and would drive family-run businesses into the ground.

"This shows the hypocrisy from Labor that they're setting up a rival state owned business that will drive many small contractors out of jobs," he said.

Mr Bailey said the LNP's opposition to the plan was due to an "ideological" desire to sell the electricity companies.

The new company will be headquartered out of Townsville. Current employees will not have to re-apply for their jobs.

The merger was an election promise by Premier Annastacia Palaszczuk.

The government predicts the merger would save taxpayers $562 million.