Morrison’s ‘big stick’ threat to energy giants
SCOTT Morrison will pressure the nation's energy giants to slash power prices immediately or face a "big stick" including threats of forced asset sales.
The prime minister also announced the government would underwrite investment in new electricity generators making good on the Coalition's pledge to act on the consumer watchdog's recommendations on how to bring down prices.
Energy Minister Angus Taylor said he would ask all states to sign on to the Morrison government's plan to force retailers to buy and invest in reliable power at a meeting on Friday.
It follows his decision to write to the energy regulator yesterday to ask it comes up with a benchmark power price could help NSW households save up to $400 a year.
The ACCC had recommended a price cap but the government has decided instead to set a benchmark and force retails to tell customers if they were being charged more to encourage them to shop around.
"There are four components to this. The first one is to empower customers with a price safety net and to end the loyalty tax put on customers all around the country simply because they've stayed with their electricity company, they pay more," Mr Morrison said.
"Secondly, to give ourselves … the big stick to keep these big energy companies in line, to stop the gouging, to ensure they pass on the savings that are being achieved in wholesale prices and I don't bluff.
"Thirdly, forcing energy companies to buy ahead, buy ahead and contract reliable energy supply into the market … so we can keep the lights on.
"And to back in investment for more new reliable power generation. That fair dinkum power generation what works when the sun doesn't shine and the wind doesn't blow because … there needs to be more reliable power generation going into the system to ensure that that can get prices down."
Mr Taylor said he would write to all energy companies to convene a roundtable where he would ask each to lower power prices by January 1.
"This is a down payment for all Australians on a fairer electricity market," he said.
Mr Morrison said to ensure this happened energy retailers would be warned the "big stick" was everything from enforceable down writing through to the courts through to divestment powers of their assets.
When asked if he was willing to make good on those threats, he said: "That's what a big stick is for."
Mr Taylor said the government would begin consulting with industry on Tuesday about the best way to support new generators which provide dispatchable energy - including coal, gas, hyrdo and batteries - being built.
He said the government would also canvass financing options for extending the life of existing coal fired power stations which could include loans.
When asked if the government expected proposals to build coal-fired power stations, Mr Morrison said: "Whether it's that or any other sort of energy-reliable supply to the market to get electricity prices down, that's what we're for."