Power com­pa­nies blast Mor­ri­son's move to hand reg­u­la­tor power to set prices

The Guardian Australia - - News - Katharine Mur­phy Po­lit­i­cal ed­i­tor

Aus­tralia’s power com­pa­nies have hit the roof over a last-minute in­clu­sion in the Mor­ri­son gov­ern­ment’s con­tro­ver­sial en­ergy pack­age hand­ing the Aus­tralian En­ergy Reg­u­la­tor power to reg­u­late power prices, with­out ju­di­cial re­view.

The Aus­tralian En­ergy Coun­cil, which rep­re­sents Aus­tralia’s elec­tric­ity and gas com­pa­nies, has ad­vised its mem­bers that the gov­ern­ment has, with the new leg­is­la­tion in­tro­duced to the House on Wed­nes­day, by­passed the states, and handed the AER power to reg­u­late re­tail prices.

In a let­ter to the power com­pa­nies ob­tained by Guardian Aus­tralia, the chief ex­ec­u­tive of the Aus­tralian En­ergy Coun­cil, Sarah McNa­mara, claims that last-minute pro­vi­sions were dropped into the leg­is­la­tion with­out warn­ing.

The ex­plana­tory me­moran­dum tabled with the bill con­firms that the AER will be given the func­tion of de­ter­min­ing re­tail prices, and “it is pro­posed that the amounts would be de­ter­mined in a non-dis­al­low­able leg­isla­tive in­stru­ment that is up­dated an­nu­ally”.

McNa­mara says in the let­ter: “This is clearly highly alarm­ing – par­tic­u­larly as it has been in­tro­duced with­out any warn­ing, let alone con­sul­ta­tion, and com­pletely ig­nores the cur­rent Coag and Aus­tralian En­ergy Mar­ket Cor­po­ra­tion process.”

With the gov­ern­ment al­ready in over­drive in an at­tempt to avoid los­ing a crit­i­cal par­lia­men­tary vote on the last sit­ting day of the year – an even­tu­al­ity that would be a de facto ges­ture of no con­fi­dence in the Mor­ri­son gov­ern­ment – rep­re­sen­ta­tives of Aus­tralia’s power com­pa­nies are in Can­berra at­tempt­ing to per­suade king­mak­ing cross­benchers to put the brakes on the en­ergy leg­is­la­tion.

The com­pa­nies have al­ready tele­graphed a po­ten­tial high court chal­lenge to the new regime. They are also lob­by­ing the states, who are part­ners with the com­mon­wealth in the na­tional en­ergy mar­ket, be­fore the fi­nal meet­ing of the Coag en­ergy coun­cil in late De­cem­ber.

The Mor­ri­son gov­ern­ment has be­gun a con­ver­sa­tion with the states about im­ple­ment­ing a de­fault re­tail price, and the com­pa­nies claim the new pric­ing pow­ers in­serted in the leg­is­la­tion step around that process.

The gov­ern­ment crept close to a pos­i­tive vote on the pack­age on Wed­nes­day night, with key cross­benchers lin­ing up in sup­port, but the con­tro­ver­sial leg­is­la­tion is yet to pass the lower house.

The par­lia­men­tary pro­gram was in chaos on Thurs­day be­cause of tac­ti­cal skir­mishes in both cham­bers, but the en­ergy pack­age was ex­pected to re­turn for de­bate and, pos­si­bly, pas­sage in the House of Rep­re­sen­ta­tives.

The gov­ern­ment has been un­der acute po­lit­i­cal pres­sure about high power prices, and wants an out­come be­fore the next elec­tion. The changes cover both en­ergy prices and a much vaunted “big stick” di­vesti­ture power.

The di­vesti­ture power was re­worked af­ter in­ter­nal ob­jec­tions from more than 20 back­benchers. Gov­ern­ment MPs ar­gued that break­ing up pri­vate com­pa­nies of­fended core Lib­eral val­ues.

The re­drafted pro­posal en­sures that di­vesti­ture will only hap­pen af­ter a rec­om­men­da­tion by Aus­tralia’s com­pe­ti­tion watch­dog, which has first sanc­tioned poor cor­po­rate con­duct.

The courts would also be the ul­ti­mate de­ci­sion mak­ers, rather than a gov­ern­ment min­is­ter – the orig­i­nal pro­posal that trig­gered an in­tense back­lash in the busi­ness com­mu­nity, and ar­gu­ments that the regime may be un­con­sti­tu­tional.

The gov­ern­ment says crit­ics of the pack­age have sided with the power com­pa­nies in­stead of con­sumers.

But La­bor has blasted both the pack­age, and the process lead­ing up to it be­ing pre­sented, re­worked, to par­lia­ment this week.

In the cham­ber de­bate on Wed­nes­day night, the shadow trea­surer, Chris Bowen, con­tended that the gov­ern­ment leg­is­la­tion had been pulled to­gether in “an all-nighter in the Trea­sury”. He said it was pos­si­ble it had draft­ing er­rors, given that the gov­ern­ment had been forced by its own back­bench to re­work its orig­i­nal pro­posal, and ex­perts hadn’t had a chance to ex­am­ine it.

The shadow trea­surer said there were orderly pro­cesses in place in the par­lia­ment “to stop bad law”.

Pho­to­graph: Mick Tsikas/AAP

The En­ergy Coun­cil, which rep­re­sents gas and elec­tric­ity com­pa­nies, says the changes to en­ergy leg­is­la­tion are ‘highly alarm­ing’.

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