PM calls for review of nation’s electricity market

Prime Minister Malcolm Turnbull says Australia’s electricity market doesn’t appear to be operating as effectively as it could.

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Now, the ACCC as been ordered to investigate the behaviour of electricity retailers– as well as contracts offered to both consumers and businesses.

“We need to get to the bottom of this in a way that protects Australian families and Australian businesses. Electricity is an absolutely essential service. So we’re tasking the consumer watch dog the ACCC to investigate this thoroughly. They have full investigative powers to request information. They and they alone can get to the bottom of this.”

Recent research by a number of organisations has highlighted significant concerns about rising electricity prices, especially on Australia’s east coast.

Treasurer Scott Morrison told the ABC the review is part of the government’s plan to deliver secure, affordable and sustainable energy across all areas.

“We’ve been working on the gas side of things, getting all the big gas producers in to get an assurance about their supply to the domestic gas industry. On top of that there’s the work being done on pumped hydro, the Finkel report, the Veritken work that’s being done, and now on the retail side of the electricity industry market we believe it’s necessary to ensure consumers are getting the best deal there. You’ve got to apply pressure in every stage of the process to ensure Australians get more affordable, more secure, more sustainable energy.”

The terms of reference call on the ACCC to consider the key drivers of retail electricity prices– the profitability of electricity retailers– and whether there’s any behaviour limiting competition.

Energy Minister Josh Frydenberg says the government envisaged the inquiry would lead to reduced power bills.

“The evidence does show that if people are prepared to move supplies they can save up to $164 a year on their power bill, sometimes more than that. But 50 per cent of people haven’t moved supply in the last five years, so they tend to be very sticky and that also applies to vulnerable households, those on lower incomes. So we want to get more information into the public realm and whatever reforms follow from that will be in the best interests of the consumer.”

The review will be carried out alongside the Australian Energy Regulator and the Australian Energy Market Commission.

They have until June 30 next year to complete the review, but will need to produce a paper within six months detailing preliminary findings.

Rosemary Sinclair is the chief executive of consumer advocacy group, Energy Consumers Australia.

She has welcomed the investigation, saying it’s essential to restoring consumer confidence.

“We’ve watched electricity prices rise very significantly over a period of about eight years and no-one’s really sure why that’s happened. In the face of recent reductions in network prices and some forecasts of future prices, consumers are really concerned to make sure we’re not paying any more than we need to for the essential service that energy is.”

Opposition leader Bill Shorten says he expects to see results from the federal government.

“We’re happy to see an inquiry of course, Mr Turnbull needs to commit to make sure this isn’t another inquiry for the sake of being seen to do something. He needs to committ to implementing recommendations by the ACCC.”

The announcement comes as a major Victorian power plant begins shutting down its generators.

The Hazelwood coal-fired power station will cease operation by the end of the week after its majority French owners decided it was no longer economically viable.

The plant has operated for more than 50 years, supplying up to a quarter of Victoria’s energy as well as hundreds of jobs.

Former Prime Minister Tony Abbott even penned an opinion piece urging the Prime Minister to keep it open.

Victorian Premier Daniel Andrews has also faced a barrage of criticism for not stepping in– including this from Nationals leader Barnaby Joyce.

“Daniel, it’s your problem mate, you have to fix your problem, and if you don’t fix it, 25 per cent of your power is gonig to switch off. See, we’ve got this ridiculous thing, think about this, when South Australia doesn’t have enough power, and that is quite often, they get their power from Victoria. But now, Victoria won’t have enough power.”

The Latrobe City Council has called for more state and federal funding to help the region through the closure, claiming its economy will be impacted by around $340 million.