Craig Kelly (Hughes, Liberal Party) Share this | Link to this | Hansard source

This afternoon, I call on the Australian Competition and Consumer Commission to investigate AGL over its conduct involving the Liddell power station. I will discuss, firstly, the importance of Liddell staying open. The Australian Energy Market Operator has estimated that, should Liddell close in 2022, there would be a likelihood of a 29 to 46 per cent risk of blackouts in New South Wales, averaging from 224 megawatts to 290 megawatts, each lasting from two to six hours. It also said that, given the uncertainties, there could be greater risk. There is great risk to the economy and to the health of Australians if we have blackouts and higher prices in this nation.

Section 46 of the Australian Competition and Consumer Act provides special requirements for companies that have a substantial degree of market power. The activities of companies that have such power must be looked at through a special lens. The ACCC's chairman, Rod Sims, commented on AGL's market dominance, saying that AGL's ownership of Liddell and Bayswater plants in New South Wales is anticompetitive. He also said:

You've got three players there and with the demand-supply balance getting tighter with Hazelwood and Northern out, that just means that when you've got less players they're in a stronger position.

I argue that it is self-evident that AGL has a substantial degree of market power. Because we have no divestiture law in this country, the ACCC normally couldn't force a company to sell an asset to a competitor if the company was still using that asset, but things are completely different if the company withdraws from the market an asset that is still potentially usable. By doing so, by refusing to put on the market an asset that is still potentially usable, a company is:

preventing the entry of a person into that or any other market—

and/or—

deterring or preventing a person from engaging in competitive conduct in that or any other market.

Those two clauses are in section 46 of the Australian Competition and Consumer Act. They prohibit a company with a substantial degree of market power using that power to prevent the entry of a person into a market. That is exactly what AGL would be doing if it closed down and dismantled the power station and did not offer it to other competitors to maybe take it on.

It may well be economically rational for AGL to decide not to continue. It may worry that we may have a future Labor government that may impose a 50 per cent renewable energy target and drive all coal-fired power stations out, as they have done in South Australia and as they are trying to do in Victoria. That is a commercially rational decision. But not to offer that asset on the market to another competitor—to withdraw that supply—is potentially anticompetitive. If you look at the numbers, you'll see it bears out. In its 2016 annual report, AGL said it supplied to the market around 46,500 gigawatts of electricity. Liddell supplied 17 per cent of this. We've seen the previous case studies. When the Northern Power Station exited the market and when Hazelwood Power Station exited the market, there was a large increase in the wholesale price of electricity. It is quite possible that, whatever loss AGL make through withdrawing Liddell from the market, they could recoup that through higher wholesale prices with the rest of their generation facilities.

In summary, the very purpose of our competition laws is to protect consumers and to advance the interests of the Australian public. AGL withdrawing supply from the market by closing Liddell and failing to offer it to competitors, even at a negative price, adversely affect Australian consumers and competition right throughout the market. Given these adverse effects, I call on the ACCC to do their job. On section 46, the ACCC in the past have not had a backbone; they have not had a spine. I call on the ACCC to do their job to investigate this, because this could be one of the most important competition cases that our nation ever has. We have a significant issue with electricity in this nation. This coalition government is doing everything it can to keep the lights on and to keep power affordable and reliable for this nation. The ACCC should do the same. I call on them again to do the due diligence, to do an investigation and to ensure that there is no misuse of market power by AGL. (Time expired)