Watch these spaces

For those of us who closely follow developments in the energy crisis saga there are now a number of dates to mark on our calendars for the last third of the year.

The first is 18 August when the major energy retailers, the Australian Energy Council and others are summoned back to Canberra for act two of the somewhat theatrical “power to the people” drama being played out by the Prime Minister. (He surely must have been pleased with the photograph doing the media rounds last week showing him, fists clenched, teeth bared, delivering an opening salvo to the suppliers.)

The second is 1 September – which is when, Malcolm Turnbull tells the media, he expects the Australian Energy Market Operator to report on the dispatchable power needs of the NEM. With a hot summer looming, this is no small matter.

The third is 27 September when the Australian Competition & Consumer Commission is required to report to the Treasurer on the initial findings of its review of retail electricity prices.

Not to be lost to view in all this is the review of electricity and gas retail markets in Victoria, released by the Andrew government this weekend. The core claim of this review is that around 30 per cent of the power bill for the average State household (using 4,000 kilowatt hours a year) before GST lies in retail charges, bigger than the costs of producing or distributing electricity.

The review panel, chaired by former Deputy Premier John Thwaites, recommends introduction of a “basic service offer” via regulation for households who “want affordable energy without fuss.”

Woven in to the panel report is the suggestion that retailers appear to purposedly make the deals they offer confusing – an accusation that crops up in other parts of the “energy crisis” debate, too, and one that plays to today’s Australian community bent for viewing many large companies across the economy through a glass darkly.

There’s a paragraph from the 80-page report that I wouldn’t be surprised to see get greater, wider currency in the energy debate: “Consumers are entitled to obtain easily understandable energy offers and enter into energy contracts that provide value for money and don’t contain negative surprises.”  To which the Thwaites panel adds: “The retail energy market should deliver benefits to all consumers, not just to those who are capable, interested, and able to navigate its complexity.”

On the broader front, a possible major development is pending around 1 October – when the federal government is committed to making a decision about whether to act for 2018 under the “domestic gas security mechanism” that now allows it to limit LNG exports drawing from the domestic gas market.

The upstream petroleum industry is continuing to rattle Turnbull’s bars on export restrictions. In the latest foray by the Australian Petroleum Production & Exploration Association, CEO Malcolm Roberts has hit back at the PM for “scapegoating” Queensland LNG exports for east coast market shortages.  East coast supply is tight, Roberts acknowledges.  “However, the industry has tripled gas production on the east coast over the past five years.  More supply would have been developed if New South Wales and Victoria had not imposed bans and other restrictions on new projects.”

Turnbull, he says, should encourage these States to follow Queensland’s gas development example “not undermine it,” adding that “the east coast market needs a massive capital injection to arrest falling production in traditional basins and to realise the potential of coal seam gas as a new, large source of supply” and declaring the export controls being proposed will jeopardize this future investment.

Another date for the calendar is 9 October when Environment & Energy Minister Josh Frydenberg will deliver a keynote address to the “national energy summit” being presented by the Australian Financial Review, followed within the hour by an address to the same forum by Labor leader Bill Shorten. South Australian Premier Jay Weatherill and ACCC chairman Rod Sims are also on the program.

Potentially of rather more importance is the October publication by the Australian Energy Market Commission of design options for a clean energy target, activity commissioned by the Queensland, Victorian, South Australian and ACT governments in an effort to push the Turnbull government on adoption of the fiftieth step recommended in the Finkel report.

The mainstream energy production and retail sector, via the Australian Energy Council, is not letting up in lobbying the Turnbull government on a CET. The measure, declares CEO Matthew Warren, is the “key reform to drive new investment and bring down electricity prices.”

Given internal Coalition politics, this issue poses a large challenge for government MPs on the House of Representatives standing committee on environment and energy, which has been engaged since February in considering “the future of the electricity grid” and should deliver its report in the year’s last quarter.

Frydenberg also has to organize the thirteenth CoAG Energy Council meeting, for which there is no public date at present, and at which the CET issue is going to be no small agenda item.

Finally, something I see as a sleeper in this cost debate is the impact of the GST on household electricity prices.  I raised this in passing in one of my blog posts earlier but got comprehensively ignored. Now a senator, David Leyonhjelm, has pounced on it in a tabloid newspaper op-ed. Electricity is as much an essential service as water supply, he declaims, so why is it wearing the GST when our water does not? Removing the GST on power purchases, he argues, will provide an immediate 10 per cent cut in household bills.

Leyonhjelm claims that, across the country, removal of the GST will save households $2 billion a year, half of it in Victoria and New South Wales. He says he will campaign on the issue at the next federal election if Turnbull and Treasurer Scott Morrison don’t take up his proposal.

Just one more space to watch.

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