CANBERRA, Feb 6, 2019, AAP. The federal government’s proposed legislation to force the break up of energy companies equates to “heavy and unworkable” intervention that won’t lower power bills, the Business Council of Australia has warned, reported The Australian.
BCA chief economist Adam Boyton expressed the sentiment at a parliamentary hearing examining the laws in Melbourne on Wednesday.
“This bill represents a departure from the principles that have long governed regulation of commerce in Australia,” he told the hearing.
“Lower prices will not be achieved by ad hoc, extreme intervention in the electricity market which brings new risk and unintended consequences.”
Mr Boyton said the best way to reduce power bills would be for the government to implement recommendations from the Australian Competition and Consumer Commission’s blueprint on the issue.
The 56 recommendations were released in July and Australians would already be seeing savings if they had been acted on immediately, he added.
Under the government’s proposed laws, energy giants could face court-ordered divestment if found to be jacking up prices – but the proposal was not one of the ACCC’s recommendations.
General Manager of the ACCC’s economic group Baethan Mullen said divestment wasn’t seen by the authority to be the best way to address issues in the energy market.
“The things that we observed in this market, which we were very concerned about … we did not see that divestiture would be a remedy that would be the best way to address those problems,” he said.
“We instead put forward a range of other recommendations which were more about introducing more competition into the market.”
The consumer watchdog has previously labelled the move as extreme.
EnergyAustralia managing director Catherine Tanna says rubber stamping the proposed laws would be like “adding a house of cards on a foundation of quicksand”.
“I appeal to you, as representatives of the Australian public, to acknowledge this bill for what it is – a desperate and dangerous measure to look tough ahead of an election,” she told the parliamentary committee.
The bill was introduced to parliament in December, having been initially flagged shortly after the coalition dumped its signature energy policy – the National Energy Guarantee – in September.
Ms Tanna says the legislation was rushed, comparing it to the two years EnergyAustralia has spent studying the viability of a pumped-hydro-electricity plant using seawater in South Australia.
Despite industry claims the bill and policy uncertainty will stave off investment, Energy Minister Angus Taylor says the strong response to the government’s plan to underwrite new generation shows otherwise.
Meanwhile, the government is seeking organisations to take part in an $11.6 million program to help small businesses save money on their bills and more easily switch providers.
“This concierge-style service is aimed at helping small businesses identify, manage and reduce their energy costs,” Mr Taylor told AAP.
An online tool to help small businesses compare their energy use and costs will also be developed as part of the program.
Applications for the energy advisory service open on Wednesday and close on March 4.