Energy retailers set to fight divestment orders

Australian Prime Minister Scott Morrison (quad)

Australian energy retailers haven’t taken kindly to the threat of divestment orders under Prime Minister Scott Morrison’s Big Stick policy, according the AFR.

The paper reports AGL Energy, Origin Energy and Energy Australia are understood to have consulted lawyers over the legislation that is asking them to bring down power prices by early next year.

Australian Energy Council chief executive Sarah McNamara told AFR forced divestment is an extreme measure, which would send the wrong signal to would-be investors and only increase sovereign risk.

“The ACCC did not recommend it, and no case has been made that it is required in any part of the current market,” she said.

Related article: Energy companies to face wrath of Morrison’s Big Stick

Origin Energy has said it supports a reference price point that makes it easier for customers to compare offers as long as it is a true reference that allows for genuine competition for the benefit of customers.

“We continue to caution against a return to price regulation as it will stifle investment right at the time we need it to maintain a secure electricity supply for customers as we replace ageing coal plants and transition to a lower emissions future,” Origin Energy said in a statement.

“We must not forget that the ACCC released a full package of recommendations right across the supply chain, which included ceasing green scheme subsidies and addressing network costs, both of which will help bring down electricity bills even further for households and businesses.”

Big energy companies have two weeks to respond to the Treasury’s consultation paper that would give it the power to break up companies if misconduct was found.

The Energy Council stated that electricity costs are a key part of the ‘energy trilemma’ along with reliability and emissions reductions.

“Investors will only view policy as durable if it effectively addresses all parts of the trilemma, including meeting emissions reduction commitments,” the Council said in a statement.

Related article: Fed Govt introduces self-meter reading