March 20, 2015
The chairman of the Australian Competition and Consumer Commission, Rod Sims, has told the Australian Financial Review that he has “deep concerns” over the proposed merger of Stanwell Corporation with CS Energy, saying it could drive up electricity prices.
The merger of Queensland’s two major coal-fired electricity generators was foreshadowed by the Labor Party during the election campaign.
The merged entity would control an estimated 66 per cent of the energy market in the State.
Also foreshadowed was the merger of the “poles and wires” businesses, Powerlink, Energex and Ergon.
Stanwell Corporation was merged with Tarong Energy – the operator of the Tarong and Tarong North power stations – on July 1, 2011. This merger, conducted by the Bligh Labor Government, was also criticised by the ACCC at the time.
Mr Sims told the AFR the first government merger had taken Queensland from one of the most competitive electricity generation sectors to the least.
“Queensland has the most concentrated electricity generation market of the four main electricity generation States,” Mr Sims said.
“Any increase in that form of concentration will obviously give greater market power and push up electricity prices. The electricity market more than others depends on competition.”
Treasurer Curtis Pitt told journalists on Wednesday he was confident the ACCC would approve the merger if it was “appropriately structured”.
However, Mr Sims told the AFR approval was “no certainty”.
Premier Anna Palaszczuk said today her government would not do anything to push up power prices.
Mr Pitt said he would “work constructively” with the ACCC to come up with a solution.
