Turnbull to Cap Power Prices Amid Dissent Over Energy Plan

(Bloomberg) -- Prime Minister Malcolm Turnbull has vowed to cap power prices in Australia in an urgent policy rejig aimed at winning over critics within his own party for the government’s energy plan.

Amid reports he faces a revolt from backbench lawmakers over his National Energy Guarantee, Turnbull said the government would penalize power companies that failed to deliver lower prices.

“We will set a price expectation which should be the most anyone pays,” the prime minister said in a Facebook post.

“If prices remain too high we will implement the toughest penalties until you are getting value for money,” Turnbull said. “We will not hesitate to use a big stick as we did with gas to make sure the big companies do the right thing.”

Trailing in opinion polls before elections due next year, the Liberal-National coalition government is under pressure to craft an energy policy after years of political gridlock has left the nation with spiraling electricity prices and unreliable supply. Yet Turnbull is hobbled by dissent within his own party, not least from former prime minister Tony Abbott, who is calling for more support for the coal industry.

Late last week, Turnbull backed down on a key element of the NEG -- his plan to legislate Australia’s Paris Agreement commitment to cut emissions by at least 26 percent below 2005 levels by 2030. Instead of being locked in legislation, the emissions goal will instead be set by regulation -- effectively by the stroke of a minister’s pen, the Australian Financial Review reported.

Abbott took to the airwaves on Saturday to criticize the prime minister. “It’s no way to run a government, making absolute commitments on Tuesday and breaking them on Friday,” he told 2GB radio.

Home Affairs Minister Peter Dutton, seen as a potential challenger to Turnbull’s leadership, publicly backed the prime minister.

©2018 Bloomberg L.P.