Australia: Origin Energy lowers profit forecast due to antitrust authority’s policies

Origin Energy has revised its guidance of how much the entity expects to earn in the energy market this year, now suggesting earnings may decline by between five and 10 percent. Its earnings forecast comes in response to the Queensland Competition Authority’s decision earlier in the year to freeze electricity prices; Origin had originally expected the act to cause $60 million, and its competitor AGL estimated the act would cut earnings by $45 million. Origin explained its reasoning, pointing out that the Clean Energy Regulator revised cost estimates of Small-scale Technology Certificates. The Regulator now says businesses may recover up to 19 percent from returned STCs, but Origin and its competitors may not be able to recover the 19 percent because the Queensland and South Australian competition regulators did not provide a mechanism to do so in its recent polity revisions. The 19 percent that Origin is allowed to recover is valued to have been $40 million.

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