The consumer watchdog has called for a major overhaul of the energy sector to drive power prices down, something Conservative Party leader Cory Bernardi has been calling for since early last year.
The Sydney Morning Herald reports, the Australian Competition and Consumer Commission’s electricity sector report released today, calls for regulators to have more power to stop ‘market manipulation’.
The ACCC said the government can back investment in dispatchable generation such as gas, batteries, or pumped hydro storage for smaller generators to break market monopolies.
There is a case for government support to underpin long-term contracts for large commercial and industrial users that brings on new dispatchable generation from players that don’t already have a large market share, the ACCC said.
The review also advocated for new rules to alter existing market power strangeholds.
It said large generator and retailers (gentailers), such as AGL, Origin and EnergyAustralia, have a strong position in the market and often charge a large premium on the sale of wholesale electricity to their own retail operations.
These wholesale prices have risen on average by 130 per cent between 2015 and 2017. Gentailers have passed these costs onto consumers, driving up power bills.
The ACCC stated there should be a cap on any further merger or acquisition of a company with more than 20 per cent market share of generation to stop monopolies arising, but this would not apply to companies building new generation.
The watchdog has also called for the Australian Energy Regulator to have greater monitoring powers “to target market manipulation”.
Senator Bernardi has told Ashleigh Gillon on Sky News the Conservative Party has long advocated a competitive tender approach that will fix the problems in our energy market whilst also saving taxpayers money.
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