‘Hands off our generators’: Queensland rejects calls to cap coal price to bring down energy bills

Premier Annastacia Palaszczuk says she won’t jeopardise state’s ability to give profits from state-owned power generators back to public

The premier Annastacia Palaszczuk has indicated that Queensland would not agree to a plan to temporarily cap the wholesale price of coal. Photograph: Darren England/AAP

The Queensland premier has resisted calls to allow a wholesale price cap on coal as a way to reduce household energy bills, telling the federal government: “hands off our generators.”

Guardian Australia reported on Monday the Albanese government may struggle to provide comprehensive energy price relief unless New South Wales and Queensland cooperate with a plan to temporarily cap the wholesale price of coal.

But Annastacia Palaszczuk told state parliament on Tuesday she would not jeopardise her state’s ability to reimburse the public via profits generated from state-owned power generators.

I say very clearly to the federal government: hands off our generators,” Palaszczuk said.

“There is no way that Queensland is going to sacrifice the returns that we are able to provide back to Queenslanders.”

Palaszczuk said she understood cost-of-living pressures were hurting households, which was why her government was keeping assets in public hands.

She pointed to state government rebates totalling $1.1bn over the last four years, providing $575 in bill relief for every Queensland household.

“We are putting the profits that are made by the generators back into Queensland households,” she said.

“I am making Queensland’s position very clear to the federal government and the NSW and Victorian premiers: our energy assets are working well in Queensland, we have the plan and we will not jeopardise the returns that are going back to Queensland households.”

The NSW treasurer, Matt Kean, said the federal government needed to look at both gas and coal.

“The federal government can and must provide a solution that involves both gas and coal,” Kean said.

“They can’t half fix a problem and pass responsibility for their issues onto others.”

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Tuesday’s declarations followed a cabinet discussion in Canberra on Monday, revealed by Guardian Australia, that flagged difficulties achieving comprehensive energy price relief.

The Albanese government has been flagging its intention to intervene to bring down power prices since October – when a new federal budget forecast pointed to a 56% increase in prices by the end of next year.

There have been suggestions that wholesale gas prices could be capped, with the ABC reporting a ceiling of about $12 a gigajoule was being considered by the government.

A number of analysts have said a gas price intervention in isolation will be insufficient to bring about noticeable power price relief for households given the bulk of power generation on the east coast comes from coal.

The federal energy minister, Chris Bowen, briefed cabinet on the components of the proposed intervention on Monday, including possible price caps for gas and coal. The Albanese government is confident it has the regulatory levers to reduce gas prices for industrial users, but there is concern a replica intervention in the coal market might be more complex for Canberra to execute, and could open the possibility of legal challenges given producers will resist.

Gas price relief can be achieved through tweaking existing federal mechanisms, like the industry code of conduct, but interventions in the coal market are normally driven by the states.

After Monday’s cabinet meeting wound up, Anthony Albanese told journalists the states would need to be involved in landing a policy solution “because of the different ownership structures, because of the different sources of energy, because of different powers that exist between the commonwealth and state and territory governments”.

Albanese said he was having one-on-one discussions with his state counterparts and would see the premiers and chief ministers as a group on 6 December for their regular catch up ahead of a national cabinet meeting on 7 December. Bowen is also scheduled to meet his state and territory counterparts around that time.

The broad policy remit for the Albanese cabinet includes executing temporary power price relief measures that don’t disrupt existing export contracts and don’t involve taxation. Policy work is being formulated by a number of government departments and regulatory agencies.

Russia’s illegal invasion of Ukraine has sent global gas and coal prices soaring. The Australian Competition and Consumer Commission has flagged publicly it is looking at wholesale prices as part of its policy advice to the government.