Energy minister warns electricity giants

Electricity giants have been put on notice by the federal energy minister to take action to lower Australian power bills, or face the political and policy consequences.

Angus Taylor met with energy retailers in Sydney to lay out the government’s plan for a “fairer deal for Australian families and small businesses”.

“The companies are on notice – they understand our expectations and they’re taking action,” the minister told reporters after Wednesday’s meeting.

“The industry will lead the process, if it’s not good enough we’ll make sure it is.”

Mr Taylor says loyalty taxes, where customers end up paying more after cheaper prices to lure them in expire, will be scrapped from July 1.

It will be easier for customers to compare deals from competing companies and a default price for power would begin at the start of next year, he added.

In line with recommendations from the Australian Competition and Consumer Commission, the federal government also wants reference bills for each network region.

Ahead of the meeting, Mr Taylor raised the alarm about the growing power of energy companies, which he says threatens the affordability, reliability and security of the national market when paired with investment in renewable generation.

“We also need a strong supply of affordable electricity when customers flick the switch,” Mr Taylor wrote in The Australian on Wednesday

The minister will use two industry forums to outline details of the government’s contentious plan to underwrite new power plants.

The plan could see Canberra bankroll a new coal-fired plant in line with the government’s willingness to shake up the market share of the big retailers.

“We need project proponents to sharpen their pencils, bringing forward bankable projects as quickly as possible,” Mr Taylor said.

“We recognise government has no choice but to play a role in underwriting these investments, given the distorted history of this sector, and the unavoidable political risks of future Labor-Greens policies.

“Many say this is all too interventionist, but we must deal with the world as it is. Previous, poor policy is biting years later and the government must act.”

Ahead of Wednesday’s meeting, three major providers banded together to say lower bills were already on the way.

Ausgrid, Endeavour Energy and TransGrid released a joint statement showing declining network costs will be reflected in lower household bills.

The retailers say current regulations should be protected and further investment is needed in the grid for more affordable bills.

Ausgrid CEO Richard Gross says $100 million has been slashed from operational costs since 2016, also leading to lower bills for customers.

“Our component of bills has reduced by $237 per customer in real terms since 2014 – a reduction of 28 per cent,” he said.