Electricity giants have been put on notice by federal Energy Minister Angus Taylor to take action to lower Australian power bills or face the political and policy consequences.
Mr Taylor met with energy retailers in Sydney on Wednesday to lay out the government’s plan for a “fairer deal for Australian families and small businesses”.
“The companies are on notice – they understand our expectations and they’re taking action,” the minister told reporters afterwards.
“The industry will lead the process; if it’s not good enough we’ll make sure it is.”
The pressure is on the electricity giants to abolish standing offers by January 1, otherwise the government will introduce a default market price six months later.
Mr Taylor insists “loyalty taxes”, where customers end up paying more after cheaper prices to lure them in expire, will be scrapped from July 1.
The minister also expects retailers to take the lead in making it easier for customers to compare deals with a voluntary comparison rate.
In line with recommendations from the Australian Competition and Consumer Commission, the federal government also wants reference bills for each network region.
Ahead of the meeting, Mr Taylor raised the alarm about the growing power of energy companies, which he says threatens the affordability, reliability and security of the national market when paired with investment in renewable generation.
New polling conducted by the Australia Institute reveals most Australians blame electricity companies for the size of their bills rather than the cost of renewable energy.
Mr Taylor will use two industry forums to outline details of the government’s contentious plan to underwrite new power plants, which could see Canberra bankroll a new coal-fired plant.
Ahead of Wednesday’s meeting, three major providers banded together to say lower bills were already on the way.
Ausgrid, Endeavour Energy and TransGrid released a joint statement showing declining network costs will be reflected in lower household bills, while saying current regulations should be protected.
Ausgrid CEO Richard Gross says $100 million has been slashed from operational costs since 2016, also leading to lower bills for customers.
“Our component of bills has reduced by $237 per customer in real terms since 2014 – a reduction of 28 per cent,” he said.