The Government's Divestment Bill will not lower energy prices for customers, is unnecessary and will discourage investment and risk increasing market volatility, the energy industry said.
The Australian Energy Council's Chief Executive Sarah McNamara expressed disappointment in the Government's decision to proceed with the "Big Stick" divestment legislation in its current form.
"The energy industry encourages the Government to amend the Bill to avoid unintended negative consequences for consumers," Ms McNamara said.
"The Bill will not lower the cost of electricity, and this was confirmed by both the Treasury and the ACCC at its Senate Committee hearing. It may result in more frequent price changes, leaving consumers confused and frustrated.
"The Bill provides the Government with unprecedented powers to force a business to sell an asset. This represents a significant shift in Australia's legal framework with economy-wide implications.
"Regrettably, the Bill also provides the Treasurer with an extraordinary power to compel energy companies to contract, and will be able to specify the contract terms, conditions and prices a corporation must offer for up to three years. This creates serious sovereign risk issues for future investment in Australia's energy market.
"This Bill greatly increases risks and uncertainty for energy market participants.
"The AEC encourages the Government to reconsider its approach and consult further with industry, state governments and the wider community on amendments to mitigate against its negative impacts."
About the Australian Energy Council
The Council represents 21 major electricity and downstream natural gas businesses operating in competitive wholesale and retail energy markets. These businesses collectively generate the overwhelming majority of electricity in Australia and sell gas and electricity to over 10 million homes and businesses.
