Finance Your Budget ‘Lobby your local MP’: the likely solution to ‘energy crisis’

‘Lobby your local MP’: the likely solution to ‘energy crisis’

ACCC takes aim at energy companies
The lack of a credible emissions target is pushing up power prices. Photo: Getty
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As the government targets energy retailers, consumers are being urged not to let politicians “distract” from their own failures to keep power prices affordable.

The Turnbull government summoned eight big retailers to Canberra for a grilling this week, including AGL and Origin.

It extracted a promise from the retailers to notify customers before switching them to more expensive energy contracts.

Treasurer Scott Morrison said the agreement would prevent consumers from being “at the mercy of big energy companies”.

It was bad timing for AGL, which announced on Thursday a full-year net profit of $539 million.

Consumer advocates welcomed the promise, as the profit margins of retailers are widely believed to have contributed to roughly a third of the massive power bill inflation seen since the early 2000s.

However, experts warned Australians not to forget the role played by Canberra in creating this mess – and to “lobby your local MPs” for a credible carbon emissions target to fix it.

Simon Bartlett, an energy researcher and former power network executive with more than 40 years in the industry, said the focus on retailers risked letting politicians off the hook.

energy reminder
Retailers will send reminders like these under the Turnbull government’s plan.

Professor Bartlett said it was politicians who created the “flawed” National Energy Market (NEM) spanning Queensland, Victoria, Tasmania, New South Wales, South Australia, and the ACT; who had “opened the door” to price gouging by retailers; and who also failed to implement a credible carbon emissions target.

“At the moment they are trying to hammer the retailers. You wonder whether they are just trying to distract us,” he told The New Daily.

“It’s okay to target the retailers, but we’re trying to move to a better world for you and I and our kids. I’d like to see some real action.”

The government’s own Finkel review concluded earlier this year that Australia is relying on expensive gas generators more heavily because, in the absence of a credible emissions target, investors are reluctant to build new generators.

Professor Bartlett called for bipartisan support for a clean energy target, as Finkel recommended.

“We need a long-term policy that all of these governments lock into, rather than every five minutes: put on a carbon tax, take off a carbon tax, put in a renewable scheme, change the targets. They just keep changing, and it creates a lot of uncertainty for investors.”

Former Liberal leader John Hewson, now an energy policy researcher at ANU, agreed Canberra shared some of the blame. But he said that was no reason to allow “oligopolistic” retailers to extract enormous profits.

“Gas and electricity prices have gone through the roof as a result of bad government policy,” he told The New Daily.

“But that’s no excuse for ripping people off at the retail end.”

The Australian Energy Council, a lobby group for 21 retailers and wholesalers, welcomed the government’s attempt to “improve the transparency of billing”, but said the underlying cause of rising prices was a supply shortage.

“This can only be fixed by solving the climate energy policy impasse which has blocked new baseload generation investment for the past decade,” said CEO Matthew Warren.

“Until we can get that new firm generation on the ground we are going to have high prices. So it’s important to get national climate and energy policy worked out. It’s the thing that will bring down power prices the fastest.”

Labor agreed.

Jim Chalmers, the shadow finance minister, said the “full-blown energy crisis” could only be fixed with an emissions target.

“We won’t get investment unless there’s some certainty,” Mr Chalmers told Sky News. “We won’t get that certainty unless there’s an agreed policy going forward that people can invest in.”

Consumers can visit the government-run Energy Made Easy website to find better deals.

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