STEVE ROSHAI MURDOCH: This week, two major policy summits are taking place. One examining the response to Australia's drought crisis while the latest version of the Government's energy plan will be up for discussion by states and territories. Eliza Edwards has the story.

ELIZA EDWARDS: The National Energy Guarantee was dismantled in the final days of the Turnbull Government, but one key element has survived the political storm. The Coalition still wants the states and territories to sign a reliability obligation, requiring suppliers to ensure there's enough power available during times of high demand. It's designed to prevent blackouts as we edge closer to summer; and will be among the key issues debated at a COAG meeting in Sydney on Friday. I spoke to Energy Minister Angus Taylor about what else is on the agenda and asked for his response to criticism Australia's been left in no man's land when it comes to policy certainty.

ELIZA EDWARDS: What exactly is this reliability obligation that you'll be asking the states to agree to?

ANGUS TAYLOR: Well, what it ensures is that we keep the lights on. Right now, we've got an enormous amount of intermittent energy coming into the system and that's a huge challenge because the power doesn't come into the system necessarily when we want it. So we need to have reliability requirements on the retailers to make sure they are capable of keeping the lights on for their customers and we'll be asking the states to sign up to this. This is a very important initiative because it ensures at a time when we're seeing enormous change in our electricity sector. We've seen real challenges - particularly in South Australia, it'll mean that initiatives are being put in place to keep the lights on; to keep factories running; to keep smelters operating; and this is crucial for the future not only for all Australian households, but for industrial businesses that are energy intensive.

ELIZA EDWARDS: What sort of targets will retailers be asked to meet and how will you force them to comply?

ANGUS TAYLOR: Well, there's significant penalties if they don't comply, and what it means is we can project out into the future and make sure that they have the capacity available to meet customer demand well ahead of time. So, that means that whatever is the demand that might be there on the hottest possible day or the biggest energy demand day, they have the capacity available, contracted or owned, to be able to deliver to all of their customers.

ELIZA EDWARDS: Is the government confident the grid will stand up to increased demand this summer and we won't see the lights go out?

ANGUS TAYLOR: We've got a real challenge in Victoria and South Australia. We know we're about 380 megawatts short to ensure that there won't be any load shedding - any blackouts. We're working right now to fill that gap. This is a constant challenge and it will only get harder; and that's why this reliability obligation we'll put in place the mechanism to ensure that we do have certainty that the lights will stay on and an obligation responsibility with big energy companies to make sure that they do their bit for their customer base.

ELIZA EDWARDS: On price, what's the involvement of the states in implementing the ACCC's recommendations like the default price offer?

ANGUS TAYLOR: Well, we'd like the states to be involved in implementing those recommendations. The default market offer will ensure that customers, whose contracts rolled over, are not getting ripped off. When you contract rolls over, in the past, the prices that have been charged have been too high. We want to see them as fair prices. These are often the customers who have the least time or least ability to go and negotiate an alternative price. We want them to get a fair deal and we would like the states to be involved in putting that process in place.

ELIZA EDWARDS: Business isn't satisfied with the energy policy that Australia's been left with and is threatening to go it alone and forge its own; what could the consequence of that be? And is it a failure of government to deliver a solution?

ANGUS TAYLOR: Well, we're not going to be distracted by anything. We are absolutely focused on getting prices down. Now, it's true, getting prices down is not something that every energy company loves, but it's our focus; and we're not going to get distracted by anything else in making sure that we bring prices down over time and that we keep the lights on. Businesses will all have their own views about this, but we won't be distracted.

ELIZA EDWARDS: The Business Council is leading this push so you don't care if they create their own energy bridges?

ANGUS TAYLOR: Well, I- what we care about is prices coming down and keeping the lights on. That is our one and only primary concern. It is what we want out of the big energy companies. They can then pursue whatever else they like but we need to see prices coming down and the lights staying on, and that will be our unrelenting and unapologetic focus.

ELIZA EDWARDS: And so the lack of policy certainty that they're concerned about though; what do you say to people like the Energy Security boss who claims that Australia's-

ANGUS TAYLOR: Well there is no lack of certainty in investment. We've got $15 billion of investment going into our electricity grid right now. Now we have to translate that investment, very significant amounts into lower prices and a reliable electricity system and that is our focus. We need the businesses, the companies in the sector more generally, focused on exactly those outcomes because that's what customers want. That's what they're asking for; I hear it every day and that's what we'll keep fighting for.

ELIZA EDWARDS: The National Energy Guarantee was so close to getting over the line, it had the support of the states and the majority of the party room. There's been criticism that Australia's now in policy anarchy from the Energy Security Board boss; what do you say to that?

ANGUS TAYLOR: Well I say that what we want and what the Australian consumers want, what businesses and households want is lower prices and keeping the lights on. The reliability mechanism will be put to COAG; we're asking the states to sign up to that. And we need the big energy companies to bring prices down. I recognise that that's not necessarily something that they love doing, but it is crucial for all Australian consumers that we get those lower prices and I'll wear whatever criticism in doing my job to make sure we get lower prices and an electricity system that delivers to its customers.