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First gas, now power: Malcolm Turnbull calls electricity bosses to Canberra

First gas, now power: Malcolm Turnbull calls electricity bosses to Canberra

Prime Minister Malcolm Turnbull has ramped up his government's intervention in the energy market by summoning electricity bosses to Canberra next week to demand they give customers the information they need to reduce their power costs.

In a letter sent yesterday to seven retail electricity chief executives plus the Australia Energy Council, the Prime Minister said the companies' various hardship programs available to customers who struggle to pay their bills were not enough.

"More needs to be done," he said, adding that a lack of transparency meant many homes and businesses were paying significantly more than they should for power because they were unaware of better deals.

More information and greater disclosure could help a household save as much as $1500 a year.

With soaring energy costs now a leading concern among voters and Tony Abbott agitating internally on the issue, Mr Turnbull says he is not prepared to wait until June next year when the Australia Competition and Consumer Commission hands down its final report into competition across the electricity sector.

"Since families are feeling price pressures now, it is important to ensure no family pays a cent more for electricity that it needs to," the letter says.

"I am particularly concerned by reports that consumers are being pushed from discounted market rates to higher, standard-priced contracts or non-discounted plans without realising it."

Mr Turnbull signals he will be demanding the power bosses improve transparency by offering their customers all available information, enabling them to switch retailer or plan.

He cites a recent Australian Energy Markets Commission (AEMC) report which found 47 per cent of households and 54 per cent of small businesses have not switched plan or retailer in the past five years.

"This suggests that these households and businesses are paying significantly more than they need to,'' he says.

"One reason why households are not taking action to secure a better deal is a lack of appropriate information."

AEMC found that many consumers are missing out on savings of up to $507 a year on their power bills and up to $285 on gas because they are not shopping around for a cheaper deal.The intervention follows him calling gas bosses to Canberra in March and demanding they free up enough fuel for domestic consumption, including at times of peak demand, or be hit with export restrictions. The government has since put in place the mechanism to impose restrictions but is yet to trigger it.

Difficult phase

In his letter to electricity bosses the Prime Minister says greater transparency and disclosure was needed and "this situation must be addressed urgently and directly".

He cited a St Vincent de Paul study which estimated a Victorian home with typical consumption could save $830 a year by "switching from the worst standing offer to the best market offer".

"Similarly, the Australia Energy Regulator found homes in Queensland, NSW and South Australia could save up to $900, $1400 and $1500 respectively."

The government is about to enter a difficult phase on energy policy. Public and private research shows power prices are a red-hot issue and Mr Abbott will be fighting any moves to adopt a Clean Energy Target (CET), as recommended by Chief Scientist Alan Finkel, arguing energy policy should be based solely on price, not emissions reduction. He similarly wants the Renewable Energy Target abolished, calling it all "green theology", and says the government should be building coal-fired power stations.

Treasurer Scott Morrison took a swing at Mr Abbott last week, noting a so-called clean coal power station would take seven years to build, cost $2 billion, and that no-one in the industry wanted to build one anyway.

With Labor prepared to dump its policy for a more robust emissions intensity scheme and agree to a CET to give industry the investment certainty it craves, Mr Morrison said this week that both major parties needed to compromise.

"Australians want their political parties to meet in the middle and deliver certainty on energy policy, because only through certainty will there be downward pressure on energy prices," he said.

"This requires sacrifice, from both sides, putting aside ideological positions to strike a deal that delivers genuine results for Australians struggling to pay their power bill."

Shadow treasurer Chris Bowen said "we agree".

"That's why Labor has already said we're ready to sacrifice our preferred policy of an emissions intensity scheme to negotiate a CET. But, while it's been two months since the Chief Scientist Alan Finkel handed his CET recommendation to the Turnbull government, all we have seen is government infighting while electricity prices just keep going up and up," he said.

Those summoned to Canberra to meet Mr Turnbull, Treasurer Scott Morrison and Energy Minister Josh Frydenberg are: Catherine Tanna (Energy Australia), Frank Calabria (Origin Energy), Andy Vesey (AGL), Paul Broad (Snowy Hydro), Paul Geason (Momentum Energy), Jeff Dimey (Alinta Energy). Carly Wishart (Simply Energy) and Matthew Warren (Australian Energy Council).

Australian Financial Review

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