Most Used Tips On How To Choose The Best Steak

The steak. Almost a staple in our diets. However, not all steaks are created equal, there are those delicious steaks, and then there are the godly tasting steaks. Knowing the subtle differences can me...

News Company - avatar News Company

3 Tips for Improving Your Physical Fitness, When You're Starting from a Pretty Bad Place

Fitness is one of the most important things in life for overall health and wellness – and maintaining a regular fitness routine has all sorts of potential benefits, ranging from better medical outco...

News Company - avatar News Company

Top 5 Events to Enjoy in the United Kingdom Every Year

The United Kingdom as any country holds numerous engaging festivals throughout the year. What makes the UK offer to stand out from the rest is their exciting travel landmarks and cities that nearly ...

Goran Kezić - avatar Goran Kezić

Friday essay: YouTube apologies and reality TV revelations - the rise of the public confession

A little over a year ago, former Australian cricket captain Steve Smith made a tearful confession and apology to the public, having been banned from cricket for 12 months for ball tampering. Smith&rsq...

Kate Douglas, Professor, Flinders University - avatar Kate Douglas, Professor, Flinders University

Population DNA testing for disease risk is coming. Here are five things to know

Screening millions of healthy people for their risk of disease can be cost-effective. But it raises ethical and regulatory concerns.from www.shutterstock.comDNA testing to predict disease risk has the...

Paul Lacaze, Head, Public Health Genomics Program, Monash University - avatar Paul Lacaze, Head, Public Health Genomics Program, Monash University

Why Sydney residents use 30% more water per day than Melburnians

Melbourne's water supplies are running low after years of drought.shutterstockThis week Melbourne’s water storage dropped below 50%, a sign of the prolonged and deepening drought gripping easter...

Ian Wright, Senior Lecturer in Environmental Science, Western Sydney University - avatar Ian Wright, Senior Lecturer in Environmental Science, Western Sydney University

From gun control to HIV: six ingredients of successful public policy

Australia’s national policy response to HIV/AIDS has been lauded as one of the best in the world.ShutterstockIn the lead up to the recent federal election, there was plenty of negative rhetoric ...

Joannah Luetjens, PhD Candidate, Utrecht University - avatar Joannah Luetjens, PhD Candidate, Utrecht University

How the dangerous evolution of Pakistan’s national security state threatens domestic stability

Protests followed the terrorist attack that killed more than 40 Indian military personnel in the disputed state of Jammu and Kashmir. AAP/Jaipal Singh, CC BY-NDIn February, a terrorist attack by Jaysh...

Robert G. Patman, Professor of International Relations, University of Otago - avatar Robert G. Patman, Professor of International Relations, University of Otago

Taming wild cities: the tall buildings of Australia show why we need strong design guidelines

Towering canyons of concrete and glass are an increasingly dominant feature of fast-growing cities like Melbourne.ymgerman/ShutterstockPrivate enterprise has shaped the skylines of Australia’s c...

Timothy Moore, PhD Candidate, Melbourne School of Design, Monash University - avatar Timothy Moore, PhD Candidate, Melbourne School of Design, Monash University

Let them play! Kids need freedom from play restrictions to develop

Playing in nature improves children's learning, social and emotional skills.MI PHAM/unsplashYou may have heard of play. It’s that thing children do – the diverse range of unstructured, spo...

Brendon Hyndman, Senior Lecturer and Course Director (Postgraduate Education courses), Charles Sturt University - avatar Brendon Hyndman, Senior Lecturer and Course Director (Postgraduate Education courses), Charles Sturt University

If you think less immigration will solve Australia's problems, you're wrong; but neither will more

More by luck than design, recent recent levels of immigration seem to be in a 'goldilocks zone' that balances economic, social and environmental objectives.www.shutterstock.comAre we letting too many ...

Cameron Allen, Researcher, UNSW - avatar Cameron Allen, Researcher, UNSW

Gamers use machine learning to navigate complex video games – but it's not free

Playing Dota 2? You can do better with a little help from machine learning.Shutterstock/hkhtt hj Some of the world’s most popular video games track your activity as you play – but they&rsq...

Ben Egliston, PhD candidate in Media and Communications, University of Sydney - avatar Ben Egliston, PhD candidate in Media and Communications, University of Sydney

Grattan on Friday: Shocked Labor moves on – but to what policy destination?

Bill Shorten has said he likes doing the family shopping, nevertheless Tuesday’s front page picture in The Australian did capture the savagery of changing political fortunes. There was Shorten, ...

Michelle Grattan, Professorial Fellow, University of Canberra - avatar Michelle Grattan, Professorial Fellow, University of Canberra

Narendra Modi has won the largest election in the world. What will this mean for India?

Narendra Modi's image was ubiquitous on the campaign trail – a sign of how much Indians have gravitated toward his cult of personality and nationalist rhetoric.Harish Tyagi/AAP The resounding vi...

Amitabh Mattoo, Honorary Professor of International Relations, University of Melbourne - avatar Amitabh Mattoo, Honorary Professor of International Relations, University of Melbourne

Who wouldn’t want cheaper power?

And who wouldn’t enjoy a bit of a stoush between the big bad generators and the government, trying to break them up on our behalf?

Even if it was largely tangential to keeping prices low.

The “big stick” of forced divestiture, where the government through a court could order an energy company to sell off bits of itself, never made it to a vote in the final chaotic fortnight of parliament just finished.

It will be the subject of a Senate inquiry that will report on March 18. After that, parliament is set to sit for only seven days before the election, so its possible it’ll never happen, under this government.

The government’s bill is good in parts

Parts of its Treasury Laws Amendment (Prohibiting Energy Market Misconduct) Bill are uncontroversial.

The main trigger was the Australian Competition & Consumer Commission’s June report, Restoring Electricity Affordability and Australia’s Competitive Advantage.

It found against forced divestiture, but thought along similar lines to the government in some respects.

The legislation presented to parliament this month bans three types of misconduct:

  • electricity retailers’ failing to pass on cost savings
  • energy companies’ refusing to enter into hedge contracts (agreements to buy and sell at a particular price) with smaller competitors
  • generators’ manipulating the spot (short term) market, for example by withholding supply.

It imposes civil penalties for the first, forces companies to offer contracts for the second, and provides for divestiture orders for the third, after they have been recommended by the government and approved by the Federal Court.

Read more: Consumers let down badly by electricity market: ACCC report

There are good reasons for the government to act on the three behaviours, although each of the its proposed solutions raises concerns.

The ACCC wants something similar but different

Firstly, the ACCC did not identify the legislation’s first target as a major cause of high prices. They did observe that it is complicated to shop around and the offers are confusing, and sometime next year Australian governments will force retailers in some states to offer fairer default offers at an affordable price.

But it unclear why the energy sector has been singled out as an industry whose retailers have to pass on cost savings and not supermarkets or banks or airlines or petrol stations or any other kind of industry.

Secondly, the ACCC most certainly did raise concerns about dominant generator-retailers preferring not to enter into hedge contracts with competitors, particularly in South Australia.

Read more: FactCheck Q&A: are South Australia's high electricity prices 'the consequence' of renewable energy policy?

It recommended that the Australian Energy Market Commission impose a “market making obligation” forcing large, so-called gentailers to buy and sell hedge contracts.

Its recommendation has the same intent as the one proposed by the government, although it has the advantage of being administered by a regulator that already exists.

Thirdly, the ACCC also concluded that concentration in the wholesale market means higher prices. Its report focused on the bidding activity of the Queensland government owned generator Stanwell Corporation.

Manipulation isn’t a major price driver

The Grattan Institute identified market manipulation by generators as a contributor to higher prices in our July 2018 report Mostly working: Australia’s wholesale electricity market.

But we found it made a much smaller contribution than high gas and coal prices and the closure of ageing coal generators.

We recommended a rule change to constrain generators’ bidding practices in specific circumstances.

Read more: Why the free market hasn't slashed power prices (and what to do about it)

The ACCC recommended giving powers to the Australian Energy Regulator to investigate and fix such problems.

It considered a divestiture mechanism of the kind in the government’s leglislation, but rejected it as extreme.

Its own less extreme recommendations would “if implemented, be a better means to restore competition to a level which serves consumers well”.

Breaking up corporations is a broader question

There may well be a case for breaking up corporations whose size prevents or substantially lessens competition. It happens overseas.

The government cites the example of the United States Sherman anti-trust legislation. It has been in place since 1890 and has been famously used to break up Standard Oil and AT&T. The ACCC does not have this power.

There is debate about whether it would work in the much smaller market of Australia.

Read more: Uncomfortable comparisons. Why Rod Sims broke the ACCC record

Allan Fels, a former head of the Australian Competition and Consumer Commission a believes it would.

But quite sensibly he argues it should apply across the board, including sectors such as banking in light of the findings of the royal commission.

Ian Harper, who led the government’s 2015 competition review, is less convinced. However, he says if a divestment power is introduced, it should be introduced broadly.

Read more: Harper Review: a mixed basket for Coles and Woolworths

It’s worth considering divestment powers broadly, rather than rushing to introduce them in one sector of the economy in what was to have been the leadup to Christmas because of a concern that its prices were too high.

The ACCC has already delivered a comprehensive report on the means to bring them down.

The government would be better served acting comprehensively on its recommendations.

Authors: The Conversation

Read more http://theconversation.com/the-government-can-restrain-electricity-prices-without-threatening-to-break-up-power-companies-its-adviser-says-so-108333