ENERGY market experts have warned against Julia Gillard’s threat to toughen electricity price regulation as state premiers dismissed her plans as “complete hypocrisy” aimed at distracting attention from her carbon tax.
The West Australian government accused Ms Gillard of “political blackmail” as a brawl erupted over soaring electricity prices that the Prime Minister blamed on the states.
Setting a December deadline for a federal-state deal on the problem, Ms Gillard threatened to legislate stronger powers for the competition watchdog to defend consumers unhappy with their power bills. But competition lawyers and industry experts said the Prime Minister had limited power to toughen the rules short of overturning a decade of national agreements, which would raise the risks for investors.
Former Australian Energy Markets Commission member Liza Carver, now a partner at Ashurst, said any pre-emptive intervention by Canberra would increase risks for investors spending billions of dollars on network upgrades to improve reliability.