THE SQUIZ
Federal Parliament meets today to turn the plan to ease the sting of power price increases in 2023 into law. Yesterday, the Albanese Government secured the support it needs from the Greens to pass the bill. But it didn’t come easy… At the start of the week, the Greens weren’t on board over concerns that coal mining/gas extraction companies will receive compensation. But to sweeten the deal, the government’s agreed to provide financial support to people with gas appliances to switch to electric in their homes in next year’s budget. But today, the legislation being considered will see the federal government cap wholesale gas prices at $12/gigajoule (note: prices are currently about $13-$22) – and in a quirk of our gloriously complex Commonwealth-state relations, NSW and Queensland’s parliaments will need to cap coal prices at $125/tonne. It’s all designed to take $230 off household electricity bills next year. 

SO EVERYONE’S HAPPY?
Yeah, naur… Independent Senator David Pocock says he’ll support the bill, although he’s still not pleased that companies like Shell and BHP will receive compensation. But Energy Minister Chris Bowen says “difficult times” need “decisive action”, and the government has worked “across the aisle with people of good faith and goodwill for a good outcome”. That aisle doesn’t reach the Coalition, though… Leader Peter Dutton says wholesale price caps will drive up power prices because gas companies will restrict their supply to the Aussie market, preferring to get better prices elsewhere. “If you’re going to take more gas out of the market at a time of increasing demand, you’re going to see an increase in prices” – something he says is “entirely predictable”.

WHAT DOES THAT MEAN?
Glad you asked. The industry made comments in line with Dutton’s, warning today’s legislation will undermine investment, reduce supply and drive up power prices. There are reports that Shell’s put the brakes on taking part in a major gas deal to prevent shortfalls along the east coast next year as it waits to see what the legislation does to the industry, and that could spell trouble for those who like to keep their lights on/businesses working. For his part, PM Anthony Albanese seems a bit meh… He reckons gas companies are “jumping at shadows” and that there won’t be “a negative impact on investment.” As they say in the classics, there’s many a slip between the cup and the lip, so let’s see what plays out in Canberra today.