Origin and AGL to begin energy ‘price wars’

Homeowners in Western Australia could see the benefit of an “unprecedented energy retail war” as providers on the east coast are making moves on local gas companies.

The AFR has reported that an “intense price war” could be on the cards as both Origin and AGL confirmed last week that they would begin selling natural gas to homes in WA.

Between them, the two companies share roughly 60 per cent of the combined gas and electricity market on the eastern seaboard albeit have not had a presence on the west coast until now.

But after Wesfarmers-owned Kleenheat ended Alinta Energy’s monopoly over household natural gas customers in 2013, AGL and Origin said they were also aiming to grab a share of the market.

Jeff Dimery, Alinta chief executive, has welcomed further competition to the territory and claimed the move from Origin and AGL was also motivated by the heavily-regulated electricity market.

“We understand that competition is good for consumers,” Mr Dimery said.

“I’m very happy to be on the record as saying that. We would also like to see a competitive landscape for electricity.

“I would assume … one of the major reasons behind their entry into the West Australian market would be on the basis that we do see full retail contestability for electricity.

“Because I’m quite sure that the decision to enter the market wouldn’t make economic sense absent the opening up of the electricity market. There’s just not the scale there to warrant their involvement.”