PM’s big chance to deliver

AGL is perfectly entitled to press on with its plan to close the Liddell coal-fired power station in New South Wales in its own corporate interest and to maximise its profit.

But a responsible and rational government would then move to compulsorily acquire the power station and keep it open in the state and national interests – and, most specifically, the benefit of all consumers, both residential and business.

Either the state or federal government could do the acquiring.

Both would be required to pay “just terms” – the federal government under the constitution, the state government under legislation.

But as AGL is effectively saying the station is worthless, I’d imagine the compensation would not have to be much more than scrap. Of course AGL wants it closed and not taken over by another player – whether the government or a private company – because it wants to squeeze power supply and thereby generate a higher electricity price and so a higher profit.

As I say, that’s its perfect right. But a government acting in the best interests of the people doesn’t have to oblige.

Keeping Liddell open – just as the same also should have been applied to Hazelwood in Victoria – should be a no-brainer. Because both stations are fully depreciated, even though they are old, they could produce very cheap power profitably. This points to the broader argument for keeping them – or at least Liddell – open. It’s exactly the same as the one pushed by the renewable energy mainchancing rent-seekers.

Because the extra power is “free” (when the sun shines or the wind blows – it isn’t really, but that’s a bigger and more complicated story), its supply can put maximum pressure on prices.

Liddell power wouldn’t be free, but because the cost of acquiring the station would be close to zero, it would essentially be just the coal price plus an operating margin.

The prime minister could not ask for a clearer opportunity to demonstrate he wants to – and can – deliver lower power prices, than signalling a re-elected Coalition government would keep Liddell open.