• Energy sector slams royal commission as a 'costly chest-thumping exercise'
Energy sector slams royal commission as a 'costly chest-thumping exercise'
05 Sep, 2018, 1 Comment

Summary: The energy industry says a proposed royal commission into electricity would be a costly "chest-thumping" exercise that would have been recommended by the consumer watchdog if it had been necessary.....

The government is considering an inquiry into the electricity sector, similar to the banking royal commission, in an attempt to drive down high power prices and reform the industry.

Grattan Insitute energy director Tony Wood said a royal commission was unlikely to achieve the stated aims and the government would be better served giving the Australian Competition and Consumer Commission (ACCC) more power.

“Given the nature of what we know caused high prices, a royal commission isn’t the right answer, it’s a lazy answer,” Mr Wood said.

“We’ve had lazy regulation and lazy policy - a royal commission is the wrong tool to fix the problems.

“There’s a number of people in charge now who said a royal commission into the banking sector was overkill and they were proved to be wrong, so now there’s a bit of chest-thumping over it. No one wants to stop it but no one wants to start it either.”

One energy retailer said if a royal commission were necessary it would have been part of the ACCC's review of the sector where it made 56 recommendations for reform.

“The bottom line is that the ACCC didn’t recommend it, so it is not needed,” he said.

Tony Pfieffer, Ergon Energy’s former chief of alternative energy and now leading Enova Energy, said a royal commission would be a waste of money.

“Does the country need to spend the money required for a royal commission, I don’t think so,” Mr Pfieffer said.

“The industry, in general, is good, although there is no question there has been an abuse of power by the bigger players.”

Mr Pfieffer said an inquiry may have the unintended consequence of lessening market competition.

“The risk isn’t to big players but to the naked retailers – without their own generation – who will be hit the most,” Mr Pfieffer said. “Increased regulation will make it harder for these smaller players who don’t have the same resources, it could force them out of the market and lessening competition.”

KPMG's Australia head of energy, Ted Surette, said a royal commission would divert time, money and resources from actively driving down power prices.

“We’ve had the Finkel review, we’ve had the ACCC report, we’ve had work from the AEMC. There’s hasn’t been a shortage of reports and analysis in the marketplace, and what would [a royal commission] add,” Mr Surette said.

However, renewable energy expert Simon Holmes à Court welcomed the potential for an investigation, saying it would likely build on the ACCC report.

Australian Competition and Consumer Commission chair Rod Sims led a massive investigation into the electricity sector.

Australian Competition and Consumer Commission chair Rod Sims led a massive investigation into the electricity sector. Photo: Darren England

“The ACCC just finished the most in-depth investigation ever into Australia’s electricity sector," Mr Holmes à Court said. "Those arguing for a royal commission may not have fully digested the ACCC report, however, until we rid the sector of anti-competitive behaviour, more investigation is unlikely to be counter-productive."

He added that a royal commission might also be used by some as a vehicle to target the renewable energy industry but believed non-partisan study of the sector would only help public understanding of the energy transition underway.


Cole Latimer smh.com.au 4/9/2018

  • MyPassion

    Terry EALING
    13 Sep, 2018

    What about the use of Implied Easements to gain complete control of private property as not to inconvenience the Energy Suppliers without negotiation of access to properties for free. I have no connection to the grid and Electrical Networks Corporation trading as Western Power yet they demand the use of my property for free without any contract in writing. Their only shareholder is the Western Australian Government and they are also the Legislator and owner yet no one wants to admit there is a conflict of interest. The deceptive practice is still being used today and the government does nothing. Yes we need a Royal Commission to regain our property rights. If there is no encumbrance recorded on the Torrens Title then people like Western Power should have to gain your permission to come onto the land. Don't know what I am talking about? Well do not buy a property with a power line through it or you will find out. All their charges to connect should be investigated as well. Please have a Royal Commission and let the landowners with a power line through their properties present evidence of Energy Operators on their properties. We all thought the banks were honest didn't we and look what a royal commission has shown us. Well what will a Royal Commission into Energy operators show us eh?

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