The Greens have called for electricity prices to be regulated on the eve of a meeting between Malcolm Turnbull and Australia’s major power retailers to discuss steps companies can take to be more transparent with their customers.
With rising power prices a red hot political issue, the Greens are now arguing that the commonwealth should give the states where power prices have been deregulated until the end of 2017 to re-regulate prices.
The Greens’ climate and energy spokesman, Adam Bandt, says that, if that request fails, then the commonwealth should put the Australian Energy Regulator (AER) in charge of prices.
The call from the Greens comes ahead of a meeting on Wednesday between the prime minister and the heads of Energy Australia, Origin Energy, AGL Snowy Hydro, Momentum Energy, Alinta Energy, Simply Energy and the Australian Energy Council in Canberra.
With government MPs under constant political pressure over rising utility bills, Turnbull has summoned the major power companies to Canberra to demand they give consumers more information so they can take steps to lower their energy costs.
A report released by the Grattan Institute five months ago highlighted the problem the prime minister now wants to raise with the energy companies.
The Grattan report pointed out that consumers struggle to find better deals to reduce their power bills because they find the market too complicated. It also argued that, if energy retailers failed to clean up their act, political pressure would increase for price regulation given the rapid escalation in energy costs.
It noted that, in 2005, all states in the national electricity market still had price controls.
“Final removal of the controls should have resulted in increased competition leading to further downward pressure on prices,” the report said. “But, since 2005, any price benefits that could be attributed to the introduction of competition seem to have disappeared”.
In a letter sent to the power chiefs before Wednesday’s meeting, Turnbull said he was “concerned by reports that consumers are being pushed from discounted market rates to higher-priced standard contracts or non-discounted plans, often without realising it”.
He suggested power companies were not giving consumers enough information about the price impact of their power plan once it comes to the end of a discount period – an observation that has been validated by independent energy experts.
But Bandt said Turnbull needs to do more than bring the power chiefs to Canberra.
“Simply jawboning the retailers won’t help,” he said.
Bandt said states and territories where price regulation is still in place “generally” have lower prices than consumers in other states.
“Deregulating electricity prices has failed,” he said. “It is time the government stepped in and capped electricity prices.
“It is time Malcolm Turnbull put the rest of states on notice that they need to act and that, if they won’t, he will.”