The threat of big stick intervention in the energy market has been enough to drive down power prices by as much as 50 per cent, even before the government's price caps come into force.
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Since the Albanese government floated market intervention as a solution to eye-watering energy price predictions in the October federal budget, the energy regulator has found evidence of early action to lower prices.
Australian Energy Regulator chair Clare Savage said since the government started talking about market intervention, retailers have been able to secure 12-month contracts at prices between 45 and 50 per cent lower than before.
Energy retailers lock in contracts with generators to supply power to their customers at a price set in advance.
"I should stress it doesn't mean we will get lower retail prices next year, but it does mean if markets keep trading as they are right now we should see an increase next year lower than previously expected," Ms Savage told ABC Radio on Thursday.
Energy analyst Tim Buckley said the halved forward pricing of wholesale electricity for NSW and Queensland in the first quarter of 2023 suggested the interventions had already been successful.
"This pre-emptive move by the market is a staggering real-time endorsement of the government's efforts - it had already priced in victory, and a massive reduction in the hyperinflation that was set to smash households and industry in 2023," he said.
The energy relief measures passed parliament on Thursday after eight hours of debate.
Along with a 12-month price cap on gas of $12 per gigajoule, the laws introduced a mandatory code of conduct that includes a "reasonable pricing" provision that will kick in after the price caps expire.
The gas industry fiercely opposed the changes, citing concerns it could create uncertainty in the market, and stifle investment and subsequently energy supply.
Business groups including the Australian Chamber of Commerce and Industry also have reservations about market intervention.
"For many years short-term 'fixes' by governments have created larger second-round problems - investment is deterred, supply is reduced, and prices are higher than they would otherwise be," the chamber's chief of policy and advocacy David Alexander said.
"Price-capping is another policy that fits into this pattern."
Treasurer Jim Chalmers disagreed the government's energy relief measures would distort the energy market over the long term.
"We respond with urgent, targeted, meaningful action to take some of the sting out of these price rises, and to provide direct energy bill relief," Dr Chalmers told parliament.
"And in doing so, we reject the fib that a functional and fair gas market must also mean the hollowing out of our manufacturing industry, or the destruction of jobs, or the sacrifice of living standards."
Clean energy group Smart Energy Council has also launched an advertising blitz to counter the gas industry's claims.
"For the last decade, the gas industry has owned this place - the answer to every question has been giving the gas industry more money," the group's chief executive John Grimes told AAP.
He supported the government's energy relief package but said it didn't go far enough.
"They are booking, this year, coal and gas, a $120 billion profit, and the advantage of that is not coming back to the Australian people," he said.
Australian Associated Press
