Labor-linked think tank under attack for power price claims

Josh Frydenberg says a Labor think tank’s report on rising electricity costs is ‘disgraceful’ and ‘deceitful’.

Energy Minister Josh Frydenberg in Canberra. Picture: Kym Smith.

Energy Minister Josh Frydenberg has called a Labor think-tank report that claims electricity prices could increase by as much as $434 by the end of year “a disgraceful, deceitful, shoddy piece of work”.

The McKell Institute, run by former Labor staffer and ­rumoured federal candidate Sam Crosby, this week released a report that says prices will spike across the east coast unless gas prices are brought under control.

Mr Frydenberg said the McKell Institute and its study partner, the Australian Workers Union, made assumptions that did not account for renewables and coal in the ­energy mix.

“The McKell Institute and the AWU, who commissioned this report, know their report has no credibility as it is based on fanciful assumptions designed to achieve a political end,” he said.

“This is a disgraceful, deceitful, shoddy piece of work which bears no resemblance to reality.”

Mr Frydenberg also criticised thestudy’s modelling of several scenarios, including one where gas prices are as high as $19 a ­gigajoule.

Mr Crosby, the institute’s executive director, said Mr Frydenberg was “dismissing” the role of rising gas prices in pushing up overall power bills.

“We wish the modelling in our report was inaccurate as well. Unfortunately, it’s not,” he said.

“Instead of feeding the public lazy denialism, the minister might want to consider engaging with the actual problem identified.”

While the wholesale price of gas is still hovering above $9 a ­gigajoule, which is higher than where the Australian Competition & Consumer Commission thinks it should be, the McKell Institute’s figures on the price of gas for large industrial users is outdated.

The study has gas prices at $22 a gigajoule for industrial users but an ACCC report from December shows the price has fallen to between $8 and $12.