Ms Tanna’s chutzpah could power Straya for decades

If gall could be converted into energy that is. Via the AFR:

EnergyAustralia managing director Catherine Tanna has unleashed on the “big stick” bill that introduces measures to force the divestment of energy assets, bluntly telling a Senate committee it is a “desperate and dangerous” measure by the Morrison government to “look tough” ahead of an election.

Ms Tanna, a board member of the Reserve Bank of Australia, said that if enacted, the legislation would add a layer of uncertainty on top of the policy vacuum that clouds Australia’s electricity sector.

“It’s like adding a house of cards on a foundation of quicksand,” she said.

More at Domain:

During the first Senate hearing on Tuesday, it was revealed that the government had failed to give its own energy rule maker, the Australian Energy Market Commission, enough time to provide advice. It had also not gone to the Energy Security Board – the overarching independent body – for any advice or consultation on the bill.

“Feedback hadn’t been asked for, and I haven’t given any,” ESB chairman Kerry Schott said during the hearing.

Ms Tanna called on the government to speak to its own energy bodies and refer to the recent electricity review carried out by the Australian Competition and Consumer Commission before implementing this bill.

I agree with Ms Tanna on the bill. It makes little sense to regulate down stream power prices via threats of divestment. Especially so when the real problem for power prices is upstream in gas prices driving up wholesale electricity costs.

What is missing from the discussion is a little history. That is, before Ms Tanna was CEO of Energy Australia, she was CEO of British Gas in Australia, and one of the key architects of the Curtis Island gas export cartel that is directly responsible for both sky high gas and power prices.

Following the purchase of BG by Shell, Ms Tanna flowed downstream with higher gas and power prices to EA, to enjoy the benefits of widening margins that the fallout from the cartel had created.

In short, we do need re-regulation to fix energy costs. Both the gas and power “markets” have failed in any meaningful sense. But the bazooka of forced divestiture or expropriation should be pointed at the upstream gas cartel in the form of much stiffer domestic gas reservation to undo the good work of Ms Tanna!

Houses and Holes

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.

He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.

Comments

    • I wonder if she has sent Scomo a draft memo telling him what to do? Seems the only way to get things done in this country.

    • Tokenism. Not many women in CEO roles so don’t bother digging into the ethics of the business.

  1. HadronCollision

    the MSM wonders why they’re so irrelevant

    they should be running hard on the stuff MW does re: Dan’s comment

  2. So in other news….. The Coalition of Foxes has stated that the current plan being considered by the farmer to house his chickens was developed without consultation from any of the foxes. “It’s an ill thought out plan that is only going to result in an over use of complicated wire, wood and concrete technologies at the cost of easy market access” said Basil Brush, director of media affairs, Coalition of foxes.

    A law that contains the threat of forced divesture is the best they could hope for and still have a government try to appear to do something. It will never be used and is far less of an impact on them than the other more extreme options of penalties or even forced nationalisation.