Fears have been raised that the Morrison government's proposed plans to forcibly break up'misbehaving'power companies
But Adrian Merrick,the head of electricity retailer Energy Locals and a former EnergyAustralia director,said power prices had risen to unsustainable levels and,since the market had failed to correct itself,it was time the government took action.
"We're really supportive of the potential of forced divestment to change the energy sector,"Mr Merrick said.
“We’ve seen an incredible concentration of market power in the hands of just a few companies,they are like oil cartels in setting energy prices.
“It has to help,things can’t get any worse by having the threat of these big sticks,” Mr Merrick said.
Prior to the election,the Morrison government proposed found to be behaving poorly in the market,set a new basic electricity price and changed how power bills showed discounted offers.
The government hoped the threats could change market behaviour in a similar fashion to how forced the gas industry to ensure more domestic supplies to avoid forecast potential gas shortages in NSW and Victoria.
"We would like to think that threats like this,like forced divestment or the gas export cap,could change electricity generators behaviours,"Mr Merrick said.
He said fears the government may use the powers to punish companies it disagreed with were exaggerated.
“The way the legislation is written doesn’t give the government the opportunity to just wake up one day and take apart a company,” Mr Merrick said.
“There are multiple hoops they have to jump through,so if it were to happen it would be prolonged,it would be needed.”
On Monday,Prime Minister Morrison reaffirmed his government’s intention to keep its'big sticks'on the table.
“We set out all our energy policies at the election,that’s what I’m going to do,” Mr Morrison said.
Power companies urged against the government implementing the plans,
AGL chief executive Brett Redman said the government should work with the energy sector to reduce power bill pressures for Australian households.
“It’s clear that cost of living is a critical concern across the country and we’re keen to continue to work with the government and the industry to lower costs for energy consumers,"Mr Redman said.
Grattan Institute thinktank energy director Tony Wood said the'big stick'fears were overblown.
“The ‘big stick’ is a threat that is unnecessary and the cause of a lot of angst but ultimately doesn’t do anything,” Mr Wood said.
He said the legislation was extremely specific,would be difficult to implement and unlikely to be used against the industry.