ACCC to look into bal­ance of power

Warn­ing af­ter COAG en­ergy meet­ing

Townsville Bulletin - - NEWS - DOMANII CAMERON

THE Aus­tralian Com­pe­ti­tion and Con­sumer Com­mis­sion will in­ves­ti­gate al­le­ga­tions of price goug­ing by state- owned elec­tric­ity gen­er­a­tors.

Op­po­si­tion trea­sury spokesman Scott Emer­son wrote to the na­tion’s com­pe­ti­tion watch­dog this week, say­ing there was sig­nif­i­cant con­cern that gov­ern­ment- owned elec­tric­ity gen­er­a­tors CS En­ergy and Stan­well had been us­ing their mar­ket power to in­crease whole­sale prices.

The LNP re­ceived a re­sponse yes­ter­day from the ACCC chair­man Rod Sims that read: “We can as­sure you that the ACCC will care­fully con­sider the is­sues raised in your let­ter, along with all other ma­te­rial avail­able to the ACCC. This in­cludes doc­u­ments and data pro­vided by elec­tric­ity sup­pli­ers and submissions to the ACCC.

“The is­sues you raised are highly rel­e­vant to the re­tail elec­tric­ity sup­ply and prices in­quiry cur­rently be­ing held by the ACCC. The in­quiry seeks to un­der­stand what is driv­ing large rises in elec­tric­ity prices and what can be done to mit­i­gate th­ese fac­tors.”

Mr Emer­son said it was clear that the watch­dog had ac­knowl­edged North Queens­lan­ders were pay­ing too much for their elec­tric­ity.

“They will in­ves­ti­gate this price goug­ing that’s forc­ing North Queens­lan­ders to pay too much for their power,” he said. “When I go to North Queens­land peo­ple tell me they’re pay­ing too much for elec­tric­ity.

“All I’m hear­ing is that La­bor are say­ing ‘ you’ve never had it so good’.

“Tell that to the peo­ple who are pay­ing too much for power.”

The ACCC must sub­mit its draft re­port to the in­quiry to Fed­eral Trea­surer Scott Mor­ri­son by Septem­ber 27 this year and the fi­nal re­port by June 30, 2018.

THE agri­cul­ture in­dus­try has warned that the en­ergy price “cri­sis” is jeop­ar­dis­ing Aus­tralia’s ca­pac­ity to pro­vide af­ford­able food and fi­bre and cru­elling our in­ter­na­tional com­pet­i­tive­ness.

The warn­ing came as fed­eral and state en­ergy min­is­ters at­tended the Coun­cil of Aus­tralian Gov­ern­ments ( COAG) en­ergy coun­cil meet­ing in Bris­bane yes­ter­day, and failed to de­liver a clean- en­ergy tar­get which the La­bor states claim is needed to de­liver pol­icy cer­tainty that would al­low crit­i­cally needed in­vest­ment.

But it did agree to the other 49 rec­om­men­da­tions of the Finkel Re­view as well as es­tab­lish­ing an En­ergy Se­cu­rity Board to over­see the health, se­cu­rity and re­li­a­bil­ity of the na­tional elec­tric­ity mar­ket.

“Im­por­tantly, gov­ern­ments will be pro­vided with greater vis­i­bil­ity of re­tail elec­tric­ity prices, re­tail mar­gins and fac­tors af­fect­ing price to en­sure they are in a stronger po­si­tion to re­spond to any in­ap­pro­pri­ate mar­ket prac­tices,’’ Fed­eral Environment Min­is­ter Josh Fry­den­berg said.

But the Na­tional Ir­ri­ga­tors Coun­cil chief ex­ec­u­tive Steve Whan said the mar­ket was rife with price goug­ing of con­sumers by those who own the as­sets.

He said it was be­com­ing so bad that the Pi­o­neer Val­ley ir­ri­ga­tion district, near Mackay, may have to moth­ball about $ 35 mil­lion in in­fra­struc­ture be­cause of ris­ing costs af­ter 2020.

“We be­lieve that the re­turn now for gen­er­a­tors is more than cov­er­ing their costs. There has been some gam­ing of the way it op­er­ates,’’ Mr Whan said.

“Even the re­tail mar­gins are well above what they should be.’’

He said the ex­ces­sive costs showed there was a mar­ket fail­ure.

Queens­land En­ergy Min­is­ter Mark Bai­ley said that a cleanen­ergy tar­get ( CET) was crit­i­cal to de­liver the sig­nals needed by the mar­ket to al­low in­vest­ment in new gen­er­a­tion, in­creas­ing sup­ply and al­le­vi­at­ing price pres­sures across the coun­try.

“The Finkel Re­view mod­el­ling clearly showed a CET would de­liver lower elec­tric­ity prices, more in­vest­ment and lower emis­sions com­pared to a busi­ness as usual ap­proach,” Mr Bai­ley said.

“That mod­el­ling showed house­holds would be around $ 90 bet­ter off per year over the next decade un­der a CET.

“The Fed­eral En­ergy Min­is­ter seems to want to keep the most im­por­tant rec­om­men­da­tion of the Finkel Re­view in the too- hard bas­ket be­cause of the in­ter­nal di­vi­sions within his party which can’t reach agree­ment on en­ergy and cli­mate pol­icy.’’

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