Tony Abbott wants the Turnbull government to buy the Liddell power station and then on-sell it to Alinta Energy, after AGL rejected the company's $250 million offer.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
AGL announced on Monday it had knocked back the purchase request from Alinta Energy because it wasn't in its best interests, despite government pressure.
Former deputy prime minister Barnaby Joyce wasn't impressed, warning Australians already can't afford their power bills.
"We need to grab AGL, cart them back in and say: 'This is BS, you're taking us for a ride, you think we're fools'," he told reporters in Canberra.
"The Australian people are not, they are not going to pay for your market manipulation which is what is coming next."
Mr Abbott said AGL is "striking against the national interest" in the same way as a militant union.
"My very strong view given that the federal government has effectively now got responsibility for energy security, the government should compulsorily acquire this power station for the price Alinta were prepared to pay and then it should sell it to Alinta," he told 2GB radio.
It would be a way to keep the station open and not have the government running it.
Energy Minister Josh Frydenberg received a phone call from AGL chairman Graeme Hunt on Monday.
"AGL's decision is disappointing, given the sale of Liddell to Alinta and the continuation of the power plant beyond its scheduled closure in 2022 would benefit consumers and had the backing of some of Australia's largest manufacturers," he said.
"It is also disappointing because it was AGL's CEO that first raised the prospect of Liddell's sale in a meeting with the prime minister and other ministers last year."
The minister argued the company said Liddell was of zero value in its investor presentation when it acquired it in 2014, but now says the $250 million upfront offer from Alinta undervalues future cash flows.
Labor doesn't believe extending the life of Liddell through a purchase is the answer.
"We know that the solution to Australia's energy and climate needs isn't to extend ageing coal-fired power plants, it's to invest in a whole suite of different renewables," Labor frontbencher Andrew Leigh told Sky News.
Australian Associated Press