Re-merger of Western Australian government energy utilities a backwards step

Sustainable Energy Association of Australia calls for more electricity market reforms, not less, as the Western Australian Government moves backwards to re-merge two government owned utilities.

The Western Australian Government's planned re-merger of State-owned Synergy and Verve is the wrong way to address concerns about the lack of competition in Western Australia's electricity market.

SEA, along with other major business chambers in WA, has consistently warned that such a move is likely to re-build barriers to market entry and significantly deter private sector investment in Western Australia's energy markets.

The reforms that lead to the disaggregation of Western Power in 2006 were, and still are, strongly supported by industry as a way of creating a competitive market. Those reforms are not yet complete.

"The Premier claims the breakup has been a failure because it has not lead to a fall in electricity prices. If the Government was to go further and enable full retail contestability and facilitate the entry of new generators and retailers to the market, there would inevitably be downward pressure on prices," says Chief Executive Kirsten Rose.

SEA welcomes the Government's commitment to improve efficiencies in energy production and reliability of supply, but says the generation and retail entities must remain separate.

Alternatively, a new model that instead creates two 'gentailers' should be considered. Indeed, such a model was preferred by many in the industry when reforms were first being considered a decade ago.

"Energy security is best served in a competitive market with a diversity of sources and suppliers," says Ms Rose.

"As a business chamber that promotes the development of innovative clean technology, SEA supports a market system that opens up greater opportunities for its members."

"Regrettably, today's announcement by the State limits those opportunities."

SEA Media Release – 10 April 2013

Re-merger a backwards step

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