The government is pressing ahead with its determination to force down domestic energy prices through intervention in the market but power bills will still rise sharply this year, writes jennifer_hewett.
Australian consumers alarmed by rising gas and electricity bills shouldn’t feel alone in their bewilderment about how such an energy-rich country has got itself into this position. Just what will happen in the domestic energy market is almost as confusing for all those expert analysts and energy companies and government regulators and ministers.
Yet despite the Albanese government repeatedly blaming the Ukraine invasion and a decade of Coalition failure on energy policy to explain Australia’s steadily rising power bills, the impact of current and proposed policy is also key to the uncertain future of domestic energy prices and investment.This obviously includes the long-term willingness of state governments in NSW and Victoria to stymie any new gas development in their states.
A government elected promising cheaper energy prices had to be seen to act – which it did in December via a temporary $12 gigajoule wholesale price cap on gas plus a code of conduct to ensure “reasonable prices” for gas indefinitely. At the same time, Canberra persuaded state governments to impose price caps on domestic coal by promising federal compensation to make up for their reduced royalty payments.
This seems to be complicating any imminent resolution to last year’s fully priced bid for Origin Energy by Brookfield and US Energy Investor EIG Partners, for example, despite Origin’s announcement of a profit upgrade last Friday. ExxonMobil and Woodside, which jointly own the biggest source of gas for the domestic market in Bass Strait, reduced their forward investment commitment to a six months’ timetable, citing the government’s “reckless” intervention.Australian Competition and Consumer Commission
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