Appointments mark next phase in power reform

THE State Government has taken key steps toward implementing its electricity market reforms with the appointment of a steering committee and two international consulting firms.

US-based consultancy Charles River Associates has been appointed to review the design and establishment of a wholesale electricity market, which was one of the key changes proposed by the Electricity Reform Task Force.

A second consulting firm, Frontier Economics, has been charged with preparing a definitive budget on the costs to government of the proposed electricity reforms.

While the impact on Western Power’s value has been estimated as high at $350 million, the direct cost to government has not previously been estimated.

The two consulting groups will report to a newly constituted steering committee, to be chaired by Anne Nolan, acting coordinator of the Office of Energy.

Other members of the steering committee include under treasurer John Langoulant, Western Power’s acting chief executive Nenad Ninkov and the Minister for Energy’s chief of staff, Michael Megaw.

It will also include John Kelly, a former Western Power executive and past member of the task force, and the executive director of the Electricity Reform Implementation Unit, a position that is yet to be filled.

The unit, part of the Office of Energy, has already seconded staff from the Treasury Department and Western Power.

The Energy Minister Eric Ripper announced last November that the State Government would proceed with wide-ranging electricity market reforms.

These include the disaggregation of Western Power into four separate entities – generation, networks, retail and regional power – by July 2004.

A wholesale electricity market is to be established by July 2005, and 12,000 Western Power customers will be eligible to choose their energy supplier from January 2005.

Charles River Associates is a US-based consultancy established in 1965. It opened an Australian office in Melbourne in late 2000. Frontier Economics was founded in 1999 with offices in London, Boston and Melbourne.

The State Government also plans to introduce ‘omnibus’ legislation to parliament next month, givin it necessary powers to implement the proposed reforms.

In other energy developments, the deadline for expressions of interest to build a new 300MW base load power station for Western Power closed yesterday.

WA’s two coal mining groups, Wesfarmers Energy and Griffin Energy, have both announced their desire to build the new power station, expected to cost about $450 million. Separately, AlintaGas and Alcoa are finalising plans for co-generation power plants at Alcoa’s alumina refineries that will compete directly with Western Power in the electricity market.

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