Finance Your Budget Default electricity market price to ease power pain

Default electricity market price to ease power pain

electricity price
Angus Taylor says power companies face political and policy consequences.
 Photo: AAP
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The government will move to set a default price for electricity in line with a recommendation from the Australian Competition and Consumer Commission’s inquiry into retail power prices.

However, Labor says the coalition is playing catch-up on a policy the opposition announced in August.

The Australian Energy Regulator will act on Tuesday to require power retailers to set their prices against a default market price. The move could help households save hundreds of dollars, and businesses thousands.

“We are putting the necessary focus on keeping the big energy companies under control to get prices down,” Mr Morrison told reporters in Canberra.

The government will also introduce a reference bill for each region under which electricity retailers will be required to calculate and advertise their discounts using a common reference point.

This will help customers to clearly compare offers to find the best deal.

A report by the Australian Energy Market Commission found customers on standing offers could be paying up to $832 per year more than the cheapest market offer in South Australia.

The figures for other states were: Victoria ($652), NSW ($411), Queensland ($369) and ACT ($273). Tasmania already has a regulated standing offer.

For small businesses the price differences range from $969 to $3457.

Energy Minister Angus Taylor will meet with his state and territory counterparts in Sydney on Friday to discuss co-operation and law changes.

Mr Morrison said the reforms would also ensure energy companies buy ahead and contract reliable energy supply into the market.

And the government would back in investment for “more new reliable power generation”, with a pipeline of energy projects to start next year.

Mr Morrison said where coal “stacks up” it could be included in the project list.

“We don’t take positions on the source of the fuel,” he said.

The Prime Minister said emissions cuts would not be forgotten in the plan.

“We will meet all of these goals while at the same time meeting the targets we have set out for ourselves when it comes to emissions reduction,” he told reporters in Canberra.

Mr Morrison said he had “never ruled out” adding money to the government’s Emissions Reduction Fund, which is being flagged by some coalition MPs.

Labor energy spokesman Mark Butler said the prices policy had been agreed by the major parties 10 weeks ago.

“It just continues to beg the question why did Malcolm Turnbull get dumped as prime minister and why did the government dump the National Energy Guarantee if this is the best they can come up with?” Mr Butler told reporters in Canberra.