Premier Colin Barnett has flagged the possible re-merger of electricity utilities Verve and Synergy, saying the break-up of Western Power by the previous Labor government “has not worked”.
Mr Barnett told reporters today the government was examining the structure of its power utilities, citing competition between Verve and Synergy, missed opportunities, higher debt levels and higher prices for electricity as evidence the break-up of Western Power had been an expensive failure.
In particular, Mr Barnett said the government was examining the relationship between power generator Verve Energy, and retailer Synergy.
“The break-up of Western Power has clearly failed so it’s the responsibility of myself and the Energy Minister now to look at the structure of the industry,” Mr Barnett said.
“The utilities, the four of them, they’re all state-government owned. There’s four CEOs, there’s four boards, there’s four separate decision making processes.
“At the moment the state faces some serious issues in energy; trying to get natural gas prices down and a continuity of supply, which is critical both for gas and for electricity generation; trying to encourage renewable energy in a sensible way; dealing with the federal government’s carbon tax, which is forecast to increase electricity prices by 8 per cent alone; these are all complex issues.
“At the same time we’ve got desires and needs to expand both the pipeline system in this state and the power line system.
“At the moment if you think of a government trying to coordinate that, how do you do it when you’ve got four different boards, all government-owned, all contradicting each other?”
Mr Barnett's comments have not been well received by industry, with the Chamber of Commerce and Industry WA saying business was "strongly opposed" to winding back the clock on energy reform.
CCI WA chief executive James Pearson said merging Synergy and Verve would be a "backwards step" and would "severely damage" the competitiveness of the future energy market.
"This is a return to the failed policies of the past," Mr Pearson said in a statement.
"It is a mistake to believe that government can produce and supply electricity more efficiently than the private sector.
"The Premier's announcement today is a complete u-turn on 15 years of reform of energy utilities. It will make it more difficult for the private sector to invest in WA's energy production and is likely to cost taxpayers more."
Mr Pearson said the Chamber was calling on the Premier to reconsider his approach, and work with business to ensure a competitive energy market.
Opposition spokesperson for energy Kate Doust also fired back at Mr Barnett, saying his comments were purely “political spin” and created uncertainty for the Western Australian electricity market.
“The only thing failing when it comes to electricity prices is the Barnett government,” Ms Doust said in a statement.
"Whenever the Premier is under pressure over a failure of his government, he trots out a distraction and this is no exception.
"Once again the Premier is trying to blame his decision to savagely increase household electricity bills on the split-up of Western Power."
Ms Doust said both the Economic Regulation Authority (ERA) and the Chamber of Commerce and Industry supported the continuation of the current electricity market.
"The ERA found in its 2010 Annual Wholesale Electricity Market Report to Energy Minister Peter Collier that the disaggregated electricity market was 'successful in creating an attractive environment to private sector investment' and is 'adequate for its purpose and relatively successful'," she said.
"The Premier's comments that disaggregation has failed flies in the face of findings from reputable bodies like the ERA and CCI.
"The Premier is hell-bent on finding someone else to blame for the pain he has inflicted on Western Australian families and his spin on the split up of Western Power is an attempt to wilfully mislead the public."
