The Commonwealth Government has received backlash after it introduced substantial changes to the Bill prohibiting energy market misconduct.
The Australian Energy Council Chief Executive, Sarah McNamara said the council is disappointed the Government has introduced this Bill into the Parliament, not only because it represents unprecedented market intervention, but also because of the secretive way the Bill has been developed without any reasonable consultation or consideration of its impacts.
“This Bill, if passed, will have far-reaching consequences beyond the energy industry. And yet, despite these ramifications and without the support of any industry body, consumer group or even its own regulator, the Government is pressing on regardless,” Ms McNamara said.
“The ACCC concluded there was no need for these intrusive powers in the already heavily regulated energy market. It is disappointing that we are not focusing on implementing the positive recommendations in the ACCC Report which would actually improve market transparency and price outcomes for customers.
“Instead the ACCC’s recommendations have been pushed aside in favour of heavy-handed and poorly drafted market interventions.”
Ms McNamara said there remain constitutional issues with the Bill and it is devoid of detail, uncertain and vague to the extent that market participants could not be confident about how to comply with it.
“Given the Government says it wants to lower prices and encourage investment, it is hard to understand why this Bill, that would achieve the precise opposite, is necessary.
“The Bill if passed would only raise risk and costs, leading to higher prices for Australian homes and businesses.”
Origin CEO, Frank Calabria, said, “We are completely aligned with the objective of making energy more affordable and support strong consumer protections, however this is not the way to achieve these outcomes.
“This Bill discriminates against companies like Origin by removing incentives to invest in generation, as we will be prohibited from earning a return on that investment, despite wearing the risk.
“We struggle to see how this legislation will reduce prices, with the more likely consequence that it increases risk, and therefore cost, for energy companies investing right at the time the market needs new supply to bring prices down for customers.”
Mr Calabria said the Bill remains a significant over-reach, giving the ACCC and the Treasurer greater powers to interfere in companies – based on their belief, without merits review and under the threat of adverse action.
“Given the quantum and nature of amendments from last week’s draft, which Origin notes has been withheld from the public, we are concerned at how hurried and intemperate this legislation is,” Mr Calabria said.
“We will now take the time to review the legislation and supporting materials in detail to understand its full impacts on our business and customers.
“Rather than rushing to legislate, we call on government to work with industry to develop a coordinated energy and climate policy to encourage much needed investment to drive the transition to clean energy at least cost to the community.
“The truth is that coordinated policy action across the supply chain, as the ACCC made clear in its 56 recommendations, is the key to delivering a material, sustainable reduction in prices for customers.”
Both parties have urged the Government to reconsider the Bill and instead return to negotiations with industry to deliver better outcomes for customers.