EnergyAustralia facing 'difficult' conditions China Light and Power has warned that its EnergyAustralia unit is facing continued "difficult" trading conditions, with little respite expected anytime soon. "Market conditions in Australia remain difficult," the Hong Kong company told shareholders in a quarterly trading update on Monday. Suppressed wholesale prices, declining energy demand, regulatory uncertainty and intense retail competition are continuing to exert considerable pressure on the financial performance of the business. Along with Origin Energy and AGL, EnergyAustralia is one of the three largest integrated power utilities in Australia, operating a suite of power stations along with holding around a quarter of the electricity market. With ongoing trading difficulties, the focus remains on cutting costs and boosting operating efficiencies as it continues to seek to work through the implications of "lower wholesale prices and reduced electricity demand." Also weighing on performance is the continued union negotiations at Yallourn for a new enterprise bargaining agreement. "Industrial action may continue and management is working to mitigate the financial impact on the company," it told shareholders. No decision has been made whether to bid for NSW government generation assets which are being sold, it said. EnergyAustralia holds the contracts to acquire output from both the Mount Piper and Wallerawang power stations near Lithgow, and is expected to bid for these assets. During the March quarter, customer numbers rose, it said although the introduction of a new billing system has placed "upward pressure" on operating expenses in the retail part of the business, it said.