PETA CREDLIN: Welcome to the show Angus Taylor. Congratulations on your appointment as Energy Minister - I don't think there's any bigger job for the Morrison Government going into what could be an election within the next six months. How have you settled into the role?

ANGUS TAYLOR: It's a real privilege to have the role Peta, but it's a big job, as you said, and an important job because I know that families and small businesses, and big businesses for that matter, around Australia are struggling with high electricity prices. We had some good impact when we took away the carbon tax, when you were in the Prime Minister’s office and that had a very positive impact, it brought prices down, but of course, in the last couple of years, we've seen an increase in wholesale prices, a new dynamic that we hadn't had prior to this. Our challenge now is to put downward pressure on those prices while we keep the lights on. So, Scott Morrison, the PM has given me one very, very clear KPI and I like clarity, and I think governments work best when they have clarity.

PETA CREDLIN: How confident are you now that you've had a couple of months in the job, you've got all the usual briefings, you're a smart guy going into the portfolio with plenty of industry background in this area - how confident are you that we're not going to see rationing, that we're not going to see blackouts over summer and that we will see prices fall for Australian households?

ANGUS TAYLOR: Well Peta, there's no question that there are challenges with keeping the lights on, particularly over summer in the southern states, particularly in South Australia and Victoria. AEMO, the market operator, has said to us that there is a real prospect of blackouts in Victoria this summer, and it's unfortunate that we are in this position. That's why we're bringing in a Retailer Reliability Obligation. In very simple terms what this means is years ahead now, the retailers will have to make sure they have enough capacity, enough supply to ensure they can meet market demand on the worst possible days. So that's a really important reform that we are bringing in. We got the COAG Energy Council to agree to progress that last Friday, and that will help to ensure that we reduce the risk of load shedding as it's called, but blackouts is the reality of what it really is. On the price side, look, there is real room to bring down prices. The big energy companies have record profits. There have been some really dodgy practices in the past. There has been bad behaviour - bidding into the market, excessive penalties being charged to customers because they pay a couple of days late, and of course, we're also seeing what I call the loyalty tax in the market, where if you don't ring up before your contract rolls over at the end of the year, then you get stung with a price that's very high simply because you've trusted the retailers. Now, they shouldn't be doing this. What's worse is that that loyalty tax - that price they're stinging you with because you didn't get round to ringing them up because you were taking the kids to sport or you were working hard in your small business, that premium they've been charging has been going up. So there's real potential to bring these prices down. The big energy companies have got to do the right thing and we're putting enormous pressure on them now to do exactly that, Peta.

PETA CREDLIN: Okay. You talked about Liddell there, and I remember the whole debate - sorry, sorry Victoria - the debate about the closure of Hazelwood. The Victorian Labor Government at the time said there would be only very minor fluctuations in price. Of course, there were very serious increases in the wholesale price and they've got these issues as we go into summer with potential blackouts. We still have Liddell running in New South Wales. There has been argy bargy for the last couple of years about will it close as scheduled by the company AGL, or will there be some sort of intervention by the government. Why doesn't the government step in here? Will you or can you? Do you have a plan to keep Liddell open?

ANGUS TAYLOR: Great question. Very quickly on Hazelwood, you are exactly right - when it shut in Victoria, the price impact was far greater than the forecasters said it would be and the reason is the big energy companies upped their bids into the market, they upped their prices in simple terms by a lot - by two or three times in many cases. And the result was we all got stung because there was no warning about closing this big, big coal-fired power station down and there was no replacement. Well we're not going to stand for that with Liddell, and there's a couple of things we're doing now to make sure that doesn't happen. One is we're bringing forward legislation which will include asset divestment powers. So if a company is threatening to withdraw capacity on the market, in worst case scenario - we don't want to have to do this - we will be able to force them to divest. But probably more importantly Peta, what we're doing right now is working towards a short list of projects that will put what Scott likes to call fair dinkum reliable power - that's dispatchable power, power that can meet customer's needs when they demand it into the market. That short list of those projects we're aiming to have together by early next year and that means we want to see a replacement for the capacity from Liddell if it's to shut or it's extended - it can go either way - but we want to see there's enough supply in the market to meet customer's needs, and we're prepared to intervene to make sure that happens. As we look down the barrel of Liddell shutting, potentially at least, we'll make sure that there is enough supply in the market and we'll have the big stick we need to make sure the big companies do the right thing.

PETA CREDLIN: Okay Angus Taylor. I know you get it, right. You and I have had many conversations long before I left politics on some of these issues - but Government has intervened in the market to build the NBN. Now I would argue, go back a long time, probably not necessarily the best use of taxpayer's money, but we are there now and it is rolling out a network that will give all Australians a level of parity about broadband access. Yet we are all squeamish about doing it when we get into the energy market. I know the pure conservatives will say: ‘let the free market operate’, but this is not a true market. It is the most muddled, the most interfered with, the most distorted market that we have in this country, but it is so, so important that it works and that there are prices that Australians can afford. You know and I know, the rest of the world in record numbers is buying and using our coal, but we're all so squeamish about it in Australia. So will you in clear terms, will you intervene in the market if you have to to keep the lights on and to keep reliable dispatchable baseload power?

ANGUS TAYLOR: Absolutely, no question, Peta. It is true that as a Liberal, I'm not one that likes to intervene in markets if I don't have to but this market is different in two respects. First of all, it's an essential service. Everyone buys it - every small business, large business, household, family, they all have to buy electricity. The second thing, and this is one that's crept up on us, is that in most electricity markets in Australia a small number of companies, typically three, have 60 to 70 per cent of the market, and that's not just of the customers, that's the generation. So they're integrated, right through. That market power, unfortunately at times, has not been used as it should have been and that means - as we saw with Hazelwood and I hope we won't see with Liddell, but there's always that threat there - they can withdraw capacity, hike the prices and threaten the lights going off. Well that's not a position a government can accept and that's why we are prepared to intervene, whether that's guaranteeing enough supply in the market with that short list of projects I talked about earlier. Whether it's through asset divestment or whether it's by saying to the retailers years ahead: ‘You have to have this capacity in place or else there'll be major penalties’. We've got a range of levers there we're now giving the government and they're levers, they are big sticks that we will use if we have to. My hope is that as good industry stewards, we'll see the energy companies change their tune, act in the interests of customers, act in the interests of all Australians and do the right thing and we can go back to being a light touch government, which is what we want to do, but if we have to, we will act.

PETA CREDLIN: You know there's that old saying: if you want to get to Dublin and the guy says - well I wouldn't start from here. I don't suspect this is the sort of energy system that you would want to run as Minister if you had a hand in designing it because you've ended up with a bit of a dog's breakfast to unravel, and there's also now the split between environment and energy. So someone else in your Cabinet has got their hands on the emissions reduction levers and you're left with trying to make an energy policy out of an emissions reduction focus that's still underlying everything that you do. Now, I go on and on and on about Paris. I was there when the negotiations were occurring, before Malcolm Turnbull signed it - this is in 2015 - and one of the ironclad statements in written form, issued by the then Prime Minister Tony Abbott was that if there was material change, Australia reserved its right to take itself out of this agreement. Now we've seen that 60 per cent of the world's big emitters are business as usual or their emissions are going up. In the case of the United States, they're completely out of it. Why are we running our energy sector to appease the bureaucrats in in and around the Paris Agreement, Angus Taylor? Why aren't we reserving our right to get out of Paris, if in the meetings in Poland in December there isn't enough countries pulling their weight, as I suspect we will find there is not?

ANGUS TAYLOR: Peta, as you know, I've got one clear goal which is to get electricity prices down while we keep the lights on, and that means we won't be dictated to by any international bureaucrat on how we get on and do that. Now, you're right. If I had to choose my starting point it wouldn't be where we are, but the truth is that we have such a flood of intermittent generation, mostly wind and solar coming into our system-

PETA CREDLIN: Mostly foreign owned, I might add too. Mostly foreign owned.

ANGUS TAYLOR: Well a lot of is. A 250 per cent increase in the next three years - I don't have to worry about getting emissions down because it's going to happen, it's going to happen well ahead of time.

ANGUS TAYLOR: Well, so just on that Angus, just let me jump in there sorry. It will happen in the electricity sector, but I had a very good look at a long report your government issued in December last year and there are big challenges, as you know, in transport and agriculture, which do not have the same price levers obviously. So you have emissions reduction targets in Paris set for those two sectors, which are difficult. Energy, granted, I think you'll get there, but I think you've got problems across the board.

ANGUS TAYLOR: Right, but Peta, I do want to emphasise this because there's a lot of people who listen to your program who will have heard people say that Angus can't do his job because he's got to focus on reaching the 2030 target. My point to you is a really simple but very, very important one - it will have no impact because we're going to get there anyway, years ahead. So I can focus on a very clear goal, which is to get prices down while we keep the lights on - to make sure Australian families and businesses get a fair deal on electricity prices and that we're not muddled in trying to hit lots of different things at once. I can be very, very focused. Now, I take your point. What I'm talking about is electricity. But that is my job, as Scott Morrison pointed out when I was sworn in, that is my job. That's what I'm focused on and it means that I can be very focused because I know that those goals will not have an impact on my ability to get prices down.

PETA CREDLIN: Look, I take your point that this is your portfolio - I think it's just one of the issues that is a challenge overall though for your government, this complete capture to the Paris agreement ahead of meetings in December, which still give Australia the opportunity to depart, particularly in agriculture, but also in transport. Granted, you're not the Minister for those two sectors, but I'll get them on the show and I'll follow up with them as well. Angus Taylor, good luck. I don't want to see blackouts over summer, no one does - least of all you. Thank you for your time.

ANGUS TAYLOR: Thanks Peta.