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Changes to spark price cuts

COMPANIES using between one megawatt and five megawatts of power a year can expect big discounts next year with the deregulation on 1 January of power transmission to the sector.

The deregulation will mean competitors in this market will have free access to WA’s electricity distribution infrastructure.

A challenger to Western Power has already emerged with WA Consoli-dated Power setting itself to grab a number of the 150 to 200 customers.

WACP CEO Charles Abner said retail competition would bring lower prices.

“We’re of the opinion that whether or not we get the contract over Western Power, the small guys still get a better deal,” Mr Abner said.

“Historically, big customers have been able to negotiate a better deal or just generate power for themselves.

“We’re trying to aggregate the small guys to get better prices.”

The customers in the 1MW to 5MW market include the Swan Brewery, BGC Cement, BankWest and shopping centres.

WACP currently buys excess power from independent producers and onsells it with a lower than 10 per cent margin. Its service is limited to the South West interconnected grid.

Mr Abner said the company was in the process of securing a contract to buy Worsley Alumina’s excess power and was discussing purchase of excess power from other independent power producers.

It is also offering customers the ability to check their power usage in real time.

However, Western Power fired the first shot in the market deregulation war with the August launch of its emPower product.

The product includes flexible tariff, billing and metering options and a range of diagnostic services to improve energy efficiency.

The 1MW to 5MW market is responsible for about 30 per cent of Western Power’s revenue.

A Western Power spokesman said both it and its competitors had been negotiating with customers in the market sector for some months.

“In most cases, customers have initiated a formal process to obtain competing proposals for their electricity supply,” he said.

The spokesman said customers in that market could cancel their contracts with Western Power and “test what the market has to offer”.

Mr Abner said his company was chasing just 1 per cent of Western Power’s 3,000 megawatt market.

He said WACP had spent between $1.5 million and $2 million on its control room to make sure it could meet the 3 per cent plus or minus

balancing requirements required for the deregulation.

It has joined with Honeywell to provide and monitor the control room.

The control room uses the Internet and virtual networks to monitor and balance its loads.

Mr Abner said telecommunications costs had dropped four times since August due to competitiveness.

Chamber of Commerce and Industry chief executive Lyndon Rowe said any competition in the power sector was a boon for WA.

“I’ve always believed that competition will give a better result than a regulator,” Mr Rowe said.

“We’ve already seen the sort of benefits competition can bring in the telecommunications market.”

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