The Australian Competition and Consumer Commission has been urged to reject AGL Energy’s acquisition of publicly-owned Macquarie Generation over concerns the sale will remove competition, provide a barrier to new retail companies, and increase power prices for NSW consumers.
A review by the Electrical Trades Union of court-enforceable undertakings drafted by AGL — an attempt to quell the ACCC’s concerns around competition — found that the commitments will do nothing to address the loss of an existing standalone market competitor, which will be eliminated if AGL is given the green light.
The union warned the ACCC that if the sale was allowed to proceed it would result in:
AGL controlling 35 per cent of NSW electricity generation making it the largest electricity generation company in NSW and Australia;
75 per cent of NSW generation being controlled by just three companies: AGL (35%), Origin Energy (25%) and Energy Australia (15%);
A barrier to entry for new market entrants in electricity generation and retailing;
No ongoing protections for retailers or consumers beyond 4 years under the proposed undertaking;
AGL being permitted to select their own “independent auditor” to police the undertaking; and
AGL independently being able to choose not to trade with competing retailers based on credit concerns.
“The ACCC can’t deny that if they approve AGL’s purchase of Macquarie Generation, competition will be reduced,” ETU spokesman Adam Kerslake said.
“Approving AGL’s takeover of Macquarie Generation will see a standalone competitor removed from the electricity market, which can’t be good for electricity consumers across NSW.
“It’s the ACCC’s job to ensure maximum competition exists in order to deliver the most competitive consumer pricing possible. Approving this deal would fly in the face of what the ACCC was designed to do.
“Only two weeks ago, NSW Treasurer Mike Baird said publicly that should the ACCC reject AGL’s offer then the NSW Government would retain ownership and in doing so would guarantee that Macquarie Generation would continue as an independent competitor to AGL and others.
“Given that there is a clear alternative that would ensure the highest level of competition possible, the ETU is of the opinion that the ACCC has no other option but to reject outright AGL’s acquisition of Macquarie Generation.
“The NSW Treasurer said that the privatisation of the publicly owned electricity generators would result in greater competition and lower prices, but it is now obvious from this planned sale that neither of those statements are true.
“The people of NSW have been lied to by Mike Baird and they deserve an apology.
“The general public last hope is that the ACCC make the best decision that will guarantee the highest level of competition. That decision is to reject the AGL deal.”