Senior energy executives have taken the opportunity of a face-to-face meeting with Malcolm Turnbull
to argue policy certainty is required to help lower power prices for
consumers – and to signal they are not interested in prolonging the life
of coal plants.
With the government under acute political pressure over rising household power bills, Turnbull secured new undertakings from major energy retailers on Wednesday to be more transparent with their customers.
Agreements reached on Wednesday included a change to the national energy market rules requiring companies to inform customers when their discounted power deal ends, and to set out the dollar impact of doing nothing.
The retailers agreed that they would contact all their customers on expired discount deals and offer them information about more favourable plans, and also develop simple fact sheets setting out “understandable” comparison rates.
The changes should help consumers shop around for better deals.
But the companies also took the opportunity of their summons to
Canberra to urge the government to deliver policy certainty by
responding fully to the recent Finkel review of the national electricity market.
Government backbenchers report being under huge pressure from their constituents over soaring power bills but internal divisions have prevented the Turnbull government, thus far, from resolving whether it wants to adopt the Finkel recommendation of a new clean energy target.
The message the executives delivered to the top echelons of the government was the country needed policy action that would lower or stabilise wholesale electricity prices, not just a focus on retail prices.
Executives told the prime minister, the energy minister, Josh Frydenberg, the treasurer, Scott Morrison, and the deputy prime minister, Barnaby Joyce, that they were interested in running businesses that were intent on reducing their climate risk, so they weren’t interested in maintaining the lifespan of existing coal-fired plants, like Liddell in New South Wales.
The message sparked questions from Joyce, who has been pushing for the Finkel response to include extending the life of coal plants and has signalled interest in constructing new ones.
In an interview with Guardian Australia in mid-July, Joyce signalled he was prepared to support a clean energy target like the one recommended by the chief scientist, Alan Finkel, if the Liberals agreed to set a threshold allowing high-efficiency coal in the mix.
The government met with the heads of Energy Australia, Origin Energy, AGL Snowy Hydro, Momentum Energy, Alinta Energy, Simply Energy and the Australian Energy Council.
After the talks, the prime minister was asked whether he would deliver a full response to the Finkel review by the end of the year.
Turnbull hedged, saying the government was waiting on additional information from the Australian Energy Market Operator about the amount of dispatchable power required to stabilise the grid after the departure of major coal plants which are coming to the end of their operating life.
He said the government would receive that information on 1 September.
“Look, this is a very complex area and you can see there is not one single silver bullet here to solve these challenges,” the prime minister said.
Turnbull denied the government had been slow to act on boosting transparency by electricity retailers, despite the fact energy experts have been highlighting current practices as a problem for months.
Frydenberg said the government had asked the Australian Competition and Consumer Commission to look at competition in the sector, including vertical integration and profit margins – but he said the government had also decided to take short-term action to deliver results for households.
Turnbull said on Wednesday the government was determined that retailers provide “as much information as they can to the customers to ensure the customers can make [informed] choices.”
“So this will ensure that Australian families, thousands of Australian families, hopefully millions of Australian families, are better informed and will then be paying less for their electricity because they will be on the plan that works best for them,” the prime minister said.
The government will hold another meeting with the same group of executives on 18 August to hear progress.
A report released by the Grattan Institute five months ago highlighted the problems addressed in Wednesday’s meeting.
The Grattan report pointed out that consumers struggle to find better deals to reduce their power bills because they find the market too complicated. It also argued that, if energy retailers failed to clean up their act, political pressure would increase for price regulation given the rapid escalation in energy costs.
On Tuesday night, the Greens called for price regulation by the end of 2017.
With the government under acute political pressure over rising household power bills, Turnbull secured new undertakings from major energy retailers on Wednesday to be more transparent with their customers.
Agreements reached on Wednesday included a change to the national energy market rules requiring companies to inform customers when their discounted power deal ends, and to set out the dollar impact of doing nothing.
The retailers agreed that they would contact all their customers on expired discount deals and offer them information about more favourable plans, and also develop simple fact sheets setting out “understandable” comparison rates.
The changes should help consumers shop around for better deals.
Government backbenchers report being under huge pressure from their constituents over soaring power bills but internal divisions have prevented the Turnbull government, thus far, from resolving whether it wants to adopt the Finkel recommendation of a new clean energy target.
The message the executives delivered to the top echelons of the government was the country needed policy action that would lower or stabilise wholesale electricity prices, not just a focus on retail prices.
Executives told the prime minister, the energy minister, Josh Frydenberg, the treasurer, Scott Morrison, and the deputy prime minister, Barnaby Joyce, that they were interested in running businesses that were intent on reducing their climate risk, so they weren’t interested in maintaining the lifespan of existing coal-fired plants, like Liddell in New South Wales.
The message sparked questions from Joyce, who has been pushing for the Finkel response to include extending the life of coal plants and has signalled interest in constructing new ones.
In an interview with Guardian Australia in mid-July, Joyce signalled he was prepared to support a clean energy target like the one recommended by the chief scientist, Alan Finkel, if the Liberals agreed to set a threshold allowing high-efficiency coal in the mix.
The government met with the heads of Energy Australia, Origin Energy, AGL Snowy Hydro, Momentum Energy, Alinta Energy, Simply Energy and the Australian Energy Council.
After the talks, the prime minister was asked whether he would deliver a full response to the Finkel review by the end of the year.
Turnbull hedged, saying the government was waiting on additional information from the Australian Energy Market Operator about the amount of dispatchable power required to stabilise the grid after the departure of major coal plants which are coming to the end of their operating life.
He said the government would receive that information on 1 September.
“Look, this is a very complex area and you can see there is not one single silver bullet here to solve these challenges,” the prime minister said.
Turnbull denied the government had been slow to act on boosting transparency by electricity retailers, despite the fact energy experts have been highlighting current practices as a problem for months.
Frydenberg said the government had asked the Australian Competition and Consumer Commission to look at competition in the sector, including vertical integration and profit margins – but he said the government had also decided to take short-term action to deliver results for households.
Turnbull said on Wednesday the government was determined that retailers provide “as much information as they can to the customers to ensure the customers can make [informed] choices.”
“So this will ensure that Australian families, thousands of Australian families, hopefully millions of Australian families, are better informed and will then be paying less for their electricity because they will be on the plan that works best for them,” the prime minister said.
The government will hold another meeting with the same group of executives on 18 August to hear progress.
A report released by the Grattan Institute five months ago highlighted the problems addressed in Wednesday’s meeting.
The Grattan report pointed out that consumers struggle to find better deals to reduce their power bills because they find the market too complicated. It also argued that, if energy retailers failed to clean up their act, political pressure would increase for price regulation given the rapid escalation in energy costs.
On Tuesday night, the Greens called for price regulation by the end of 2017.
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