Federal Energy Bill “unworkable, confusing, discourages investment”

investment

Origin Energy has provided a submission to the Senate Inquiry into the Treasury Laws Amendment (Prohibiting Energy Market Misconduct) Bill 2018, stating the legislation will be detrimental to the electricity market.

The submission states the Bill is “unworkable, confusing, discourages investment, is an over-reach into a free market” and is potentially a costly burden on taxpayers.

The Bill was created under the Morrison Government as part of the Prime Minister’s Big Stick policy that threatened forced divestiture of energy retailers in an effort to bring down power prices for consumers.

“While more work is required to improve outcomes for consumers, the Bill is not the answer, nor is it an appropriate substitute for a long-term policy framework,” Origin says in the submission.

Related article: Energy companies to fight Morrison’s Big Stick

The retail prohibition requiring the mandatory pass through of cost savings in retail tariffs is unworkable and inconsistent with the normal operations of competitive markets.

“The prohibitions relating to the wholesale and contracts markets duplicate existing rules and would only create confusion and uncertainty for participants, with the potential to constrain legitimate behaviour.

“The divestiture power is unprecedented and is a disproportionate and punitive response to the potential contraventions outlined in the Bill.

“Overall, the new measures will increase the risk profile of the energy sector, which will dissuade future investment by the private sector.”

Related article: Report: Consumers get short end of Big Stick

Origin says it recognises that industry must continue to do more to maintain downward pressure on prices by investing in supply and making it easier for consumers to compare retail offers.

“For our part, Origin has increased output at our Eraring power station following recent generator retirements, and we are progressing work on potential upgrades to our Quarantine and Shoalhaven stations,” Origin says.

Click here to read the full submission.