Amid growing pressure from the public to lower the price of power bills, the federal government is considering “temporary and meaningful” measures to intervene in the energy market.
However, putting price caps on coal and gas would likely require compensating the producers, while the states would want to be compensated for the loss of royalties.
A senior NSW government source said while it may not legally have to provide any compensation, politically it would have to compensate coal producers and therefore it didn’t see why the Commonwealth was leaning on states. “We understand the pressures which are on [power prices]. This is a global phenomenon that is occurring,” Albanese said.
Tony Wood, director of the Grattan Institute’s energy program, said the move to add coal had complicated the process and suggested the government could move on gas first. This is because putting a price on gas would only require regulating the short-term spotting market, while going after coal would likely involve intervening in long-term contracts.
“We want to make sure our state’s interests are protected,” he said. “It’s my expectation that South Australians won’t be punished because we’ve done the right thing.”
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