PM’s move comes as Coalition remains deadlocked over energy policy and MPs come under pressure from their constituents over soaring bills

This article is more than 3 years old

This article is more than 3 years old

Malcolm Turnbull has summoned the major power companies to Canberra to demand they give consumers more information so they can take steps to lower their utility bills, despite the fact his government remains deadlocked on the future policy mechanism to give energy investors and the market certainty.

The prime minister has asked the heads of Energy Australia, Origin Energy, AGL Snowy Hydro, Momentum Energy, Alinta Energy, Simply Energy and the Australian Energy Council to come to Canberra next Wednesday to discuss options that would lower power prices to consumers.

In a letter to the power chiefs, Turnbull says he is “concerned by reports that consumers are being pushed from discounted market rates to higher-priced standard contracts or nondiscounted plans, often without realising it”.

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The prime minister suggests power companies are not giving consumers enough information about the price impact of their power plan once it comes to the end of a discount period – an observation that has been validated by independent energy experts.

Turnbull says St Vincent de Paul found recently that a household in Victoria with typical consumption could save up to $830 per year if they switched to the best offer on the market.

He says the lack of appropriate market information to consumers is a problem that “must be addressed, urgently and directly”.

A report released by the Grattan Institute five months ago highlighted the problem the prime minister now wants to raise with the energy companies, pointing out that consumers struggle to find better deals to reduce their power bills because they find the market too complicated.

The institute’s energy program director, Tony Wood, said in mid-March the way retailers present discounts is “confusing and possibly misleading” and competition is not driving innovation in customer services.

“Retailers have been slow to build offers based on the benefits available through smart meters, or the bundling of new technologies such as solar power and battery storage systems,” Wood said.

While consumers are clearly looking for quick and concrete action to reduce power prices, the summons to Canberra in the first parliamentary sitting week after the winter recess comes minus a resolution to the central recommendation of the recent Finkel review of the national electricity market.

Government backbenchers report being under huge pressure from their constituents over soaring power bills, but internal divisions have prevented the Turnbull government, thus far, from resolving whether it wants to adopt the Finkel recommendation of a new clean energy target.

Market participants argue rising power prices are a function of a shortage of gas, behaviour by retailers of the type identified in the Grattan report, and continuing uncertainty about climate and energy policy after a toxic decade of political contention over carbon pricing.

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The Turnbull government has greenlighted 49 of the 50 recommendations from the Finkel review, but not the clean energy target, a development that has prompted Labor state governments to signal they may go it alone on a policy mechanism to replace the national renewable energy target, which ends in 2020.

Some government backbenchers remain opposed to the clean energy target, and the former prime minister, Tony Abbott, has been on a public crusade about how the government needs to avoid policies which usher in a greater share of renewables into Australia’s energy mix.

The prime minister has requested further work from the Australian Energy Market Operator about how to ensure the dispatchable power requirements of the electricity grid can be met, and has flagged a reverse auction scheme favoured by the Minerals Council of Australia, as one possible outcome.