Origin Energy to cut power bills as it ‘turns the corner’ on prices
One of Australia’s big three electricity retailers, Origin Energy, has declared it has “turned the corner” on power prices, with a chunk of renewable energy supply due online by 2020 expected to further reduce wholesale and household bills.
As the federal government threatens heavy-handed intervention if the big electricity players fail to cut spiralling energy prices, Origin said it expected to reduce bills after delivering flat or falling power prices for customers in the 2018 financial year.
“We believe we have turned the corner on prices, with significant renewable supply due to come online by 2020, further reducing wholesale electricity prices,” Origin chairman Gordon Cairns and chief executive Frank Calabria said in the company’s shareholder review, released yesterday. “We expect to pass these savings on to customers.”
New federal Energy Minister Angus Taylor warned last month the government was prepared to “wield a big stick” to reduce high power prices in a speech in which he accused the energy giants of acting like the big four banks in breaching the trust of consumers.
Origin said there “is no doubt” the political and regulatory environment was changing quickly and noted the earnings outlook it gave at its annual results was based on no material changes in market conditions and regulation.
“We know the energy market is set to face ongoing scrutiny, and with this comes discussion of greater regulation,” Mr Cairns and Mr Calabria said. “On behalf of our customers, we will continue to contribute constructively to the policy debate.”
The Sydney-based company, which has signalled a return to dividend payments in the current financial year, said it would update shareholders on the prospect of a payout at its annual meeting on October 17.
There has been mounting speculation Origin may embark on a strategic review of its upstream assets, worth more than $8 billion, after investment banks and boutique advisers were approached to pitch for the gig.
But Origin said earlier this week there had not been a strategic review or request for proposal in the market for such a process. Mr Calabria, appointed chief executive in 2016, was paid $2.96 million last financial year, compared with $2.67m the previous year when he had been in the top job for nine months.
Thursday, September 20, 2018
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