Power play angers Rio

RIO Tinto says companies that generate electricity on the east coast have too much market power, which they are exercising to deliberately drive up prices.

Limits on other stricter needed to problem, the says.

In a submission to the Australian Competition and Consumer Commission, Rio’s local head of aluminium, Bruce Cox, says the National Electricity Market is not as competitive as it should be.

Mr Cox has suggested greater powers for the Australian Energy Regulator to let it intervene.

“The current regulatory framework ... appears unable to curb the clear exercises of market power which have become increasingly apparent with shifts in ownership, asset closure and in some cases, consolidation of generators,” he said.

The behaviour of such companies was “unconstrained by considerations of affordability of electricity”, Mr Cox said.

“Generation companies are using their scale to engage in behaviours that seek to work to the boundaries and limits of the National Electricity Rules to maximise returns.”

The call follows a push from Rio subsidiary Tomago Aluminium for policies that would promote more coalfired power. ownership or regulations are overcome the mining heavyweight