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Feds, Qld at odds over energy price gouging

Frydenberg on the Bolt Report. Photo: Channel Ten

Queensland Premier Annastacia Palaszczuk has dismissed allegations from Canberra that state-owned power generators are using their big market share to drive up energy prices, saying instead the flawed National Energy Market is to blame.

Palaszczuk responded on Tuesday to a letter sent to the Australian Energy Regulator by federal energy minister Josh Frydenberg, in which the federal minister suggested Queensland state-owned generators Stanwell Corporation and CS Energy may be using their market power to drive up prices.

According to a report in the AFR, Frydenburg suggested the generators were under pressure from the state to drive up prices, with the state’s FY18 Budget forecasting a $1.5 billion dividend from the generators, more than double what it was two years ago.

“Strategic rebidding by these generators is contributing to higher prices by these generators than would otherwise eventuate in a more competitive market,” Frydenberg’s letter reportedly says.

“Specifically, Stanwell Corporation’s behaviour suggests it may have engaged in economic withholding by pricing a significant proportion of its capacity at the market cap throughout the summer period.”

Frydenberg reminded the AER it had been granted powers to monitor wholesale prices in 2016, adding: “Accordingly, I am writing to seek your advice on whether these tools, in addition to AER’s existing powers, are able to respond to these strategic bidding practices.”

Palaszczuk struck back, saying Queensland was far better under Labor than it would be under a Liberal National Government, with her analysis showing LNP policies could have added $600 to the average Queensland power bill if they were in power.

“The great irony of calls by the LNP at a state and federal level for enquiries into bidding behaviour is that the bidding practices in which we have intervened were in effect when Tim Nicholls was Treasurer and a shareholding minister,” the premier said on Tuesday.

“[Nicholls] could have taken the action we have to put downward pressure on power prices, but instead was focused on making the generators look as profitable as possible as he prepared them for sale.

“Had those sales occurred, there would be no dividends to reinvest today, and no way for the government to intervene with what by then may have been foreign-owned generators.”

Rather than blaming Queensland’s generators, Palaszczuk argues the entire National Energy Market is letting Queensland down.

“Day after day a simple assessment of the National Energy Market shows Queensland doing all the heavy lifting, using our mix of coal, gas and renewables to deliver low wholesale prices while being able to sell excess energy to southern states that lack of generation capacity,” she said.

“The simplest way to increase downward pressure on power prices is for the Federal Government to listen to Alan Finkel and take immediate action to fix the National Energy Market.”

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