Opinion: Cut the energy virtue signalling and start serving customers
Published in the Australian Financial Review
In today's energy market, someone profound has been forgotten: the customer.
Boards and chief executives have become increasingly obsessed with "triple bottom lines", environmental targets, diversity training and corporate social responsibility reports. But businesses are not sustainable unless they deliver customers a fairly priced quality product or service.
If you forget customers, competitors and governments are sure to remind you. Nowhere is this more important than utilities providing essential services – such as electricity – to all Australian households, businesses and other organisations, including hospitals and schools.
As we have seen with the banks, a raw deal on essential services angers Australians. No amount of corporate virtue signalling or spin will make up for customers who feel ripped off.
Higher electricity prices cost Australian jobs in sectors including agriculture, aluminium, steel, cement and manufacturing.
A clear plan
This government's solutions will not be driven by ideology or grand gestures, but pragmatism. Our plan is clear.
The Australian Competition and Consumer Commission voiced its concerns about the lack of competition in wholesale and retail markets, and the high-price customers are paying as a result.
We will move to prevent unreasonable late payment penalties, strengthen the powers of regulators to tackle dodgy practices and continue to crackdown on rampant over-investment in distribution and transmission.
With wholesale prices now well off their peaks and energy company profits at record levels, we need to see wholesale price reductions passed through to customers.
Third, we will back investment in baseload generation to retain supply and encourage competition. We will force divestments if necessary. Opening up our abundant natural resources – gas, coal, water and the sun – will ensure Australians receive the cheapest and most reliable electricity.
Stretched to the limit
The reliability of our electricity grid is under pressure. The renewable energy targets in Victoria, Queensland and the ACT are dramatically worsening this situation, with unprecedented additions of intermittent wind and solar putting pressure on reliable baseload generators to exit.
The sharp price increases and loss of reliability and security after the closure of Northern in South Australia and Hazelwood in Victoria demonstrate how this plays out, as the ACCC analysis showed.
Meanwhile, emissions reductions are the least of our problems, with every prospect we will reach the 26 per cent reduction below 2005 levels ahead of schedule and without interventions.
Bipartisanship is preferable, but Labor needs to decide if it accepts our unambiguous focus on lower prices while keeping the lights on.
The situation is dire enough without interventions that will drive up prices and drive down reliability by prematurely driving out coal and gas.
Australians have had enough of unaffordable power bills driven by Labor's virtue signalling, and of corporate greed dressed up as saving the planet. It's time to go back to basics and put customers first.
Angus Taylor is the federal Minister for Energy and member for Hume.
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