WA Energy Minister, Mike Nahan, has announced a State Government electricity reform program aimed at reducing the high cost of electricity within Western Australia.
Following an industry review, Dr Nahan said the Western Australian Government would begin taking the necessary steps to limit future electricity price increases and reduce the requirement for subsidy of the industry that is forecast to cost the State more than $500 million in 2014-15.
The Energy Networks Association (ENA) has welcomed the response with ENO CEO, John Bradley, stating that customers will benefit from nationally consistent economic regulation of networks.
One of the main reforms will also be introducing choice of electricity retailers for household and small business customers.
“The benefits of competition between energy retailers are already evident in gas services where Alinta and Kleenheat compete vigorously for household and small business customers with attractive price offers,” the Minister said.
“Subject to adequate consumer protection mechanisms being established, households and small businesses should have the same opportunity for choice and better prices in their purchase of electricity services. It is also expected that Synergy will be free to retail gas to small business and residential consumers once full retail contestability is introduced.”
The Government will also transfer regulation of the Western Power electricity network to the Australian Energy Regulator, which regulates electricity networks in all other Australian States and Territories. This will provide the benchmarks and incentives for Western Power to meet national best practice standards in operations, efficiency and cost.
Mr Bradley said this transfer to the Australian Energy Regulator is a significant step toward the realisation of national reform agenda set over a decade ago. It will strengthen the national character of energy regulation.
“It will also increase the transparency of Western Power’s technical rules and rule change processes, and include Western Australia in the national discussion around how to respond to the opportunities and other impacts of technological change in the sector,” Dr Nahan said.
Reforms will also be developed to increase transparency and efficiency in WA’s wholesale electricity market.
The Government will not split the State-owned electricity business Synergy and Western Australia will not join the national electricity market.
“There are opportunities for large improvements in the performance of the Synergy business and the local WA electricity market that must be achieved,” the Minister said.
”This is our focus, rather than further structural changes to, or sale of, the State’s electricity corporations.”
