Competition empowers David

ENERGY is a competitive business, even in the isolated market of WA which seen price falls unequalled in the rest of Australia.

Though some rivals may disagree, that is the view of David Eiszele managing director of the WA’s dominant electricity generator Western Power.

Mr Eiszele said WA’s electricity price, once the highest in the land, had fallen about 15 per cent on average when compared to the rest of Australia as Western Power reacted to competitive threats in the fast deregulating energy market.

And he argues consumers would be better off if Western Power was privatised like WA’s gas utility AlintaGas which was floated on the stockmarket recently.

“We’re in a competitive market. There’s no way the market place would accept a price increase,” Mr Eiszele said.

He said Western Power’s generation competitors included Alcoa and Trans Alta. Its main retail competitors were Perth Energy and WA Consolidated Power.

But some of these rival WA companies claim Western Power still has a virtual monopoly.

WA’s energy market was deregulated on January 1 to allow customers using between one megawatt and five megawatts a year to choose their electricity supplier. That opened about 30 per cent of Western Power’s revenue to competition. So far the utility has lost 10 of its 120 customers in that market.

Gas also competes for Western Power’s business.

AlintaGas’ hold on the gas market is protected by legislation for the next three years. Once that period passes, Western Power plans to enter the gas market.

“We want to be a total energy provider. I don’t think the WA energy market will be competing gas on gas and electricity on electricity. It will be fought on solutions,” Mr Eiszele said.

“AlintaGas will soon be selling electricity in deregulated areas.

“We’re meeting that threat by keeping costs down and boosting customer service.”

Western Power recently spent between $10 million and $12 million on new call centres and systems that allow it to give customers instant feedback on how problem resolutions are progressing.

In the past 12 months it was able to handle all fault calls that came through – something it has never been able to do before.

Mr Eiszele said while the utility was Government-owned, it operated as a private company. It reported a $154 million after tax profit this year.

“The Government has clearly said it has no plans to privatise Western Power but we believe the best way for us to operate is as a private company,” he said.

Mr Eiszele said WA could be expecting an electricity shortage by the summer of 2004.

The State’s energy consumption is growing at about 100 megawatts per year.

The last power station onto the South West Interconnected System was the 300 megawatt Collie Power Station in June 1999. At the same time, Western Power closed its Bunbury plant.

Mr Eiszele has been a utility man all his life, beginning his career as a cadet engineer with Tasmania’s Hydro Electric Commission. He came to WA in 1964 to join the then State Energy Commission of WA and was involved in the design and construction of a number of power stations.

Mr Eiszele said he wanted Western Power to be a low-cost energy provider that served its customers efficiently and helped WA’s economic development.