Electricity change getting under way

AFTER more than two years of reviews and planning, the reform of Western Australia’s electricity industry is starting to get under way.

The reforms, costing an estimated $153 million, will culminate in the division of Western Power into four separate entities on July 1 2004 and the establishment of a wholesale market on July 1 2006.

Acting coordinator of energy Anne Nolan and Electricity Reform Implementation Unit executive director Steve Edwell will commence industry briefings on their three-year work program this week.

Mr Edwell said industry, unions and consumers would all be able to participate in the roll-out of the reform process.

“Stakeholders need to have a sense of what’s happening and an opportunity to provide input,” he said.

The two key pieces of legislation for the reform process will be introduced in November.

The Electricity Corporations Bill will give effect to the disaggregation of Western Power.

The Electricity Industry Bill will provide the heads of power to develop the access code; customer protection measures – including an industry-funded Ombudsman scheme; and the wholesale market.

It will also establish a licensing regime for industry participants.

Mr Edwell said the second bill simply provided the heads of power. The details of the access code, market rules and so on would be developed separately.

The wholesale market is due to start one year later than the Government had previously announced.

Mr Edwell said a review of the wholesale market by consulting group Charles River Associates had delayed the start of detailed market design by eight months.

Charles River also estimated that it would take about three years to implement the market model.

The first step in this three-year process will be the formation next month of a group with Government, Western Power and industry representatives to develop detailed rules for the wholesale market.

In October the draft access code that provides a framework for third party access to public and private electricity networks will be released.

Mr Edwell said network operators would be supervised by the planned Economic Regulation Authority and meet prescribed service standards.

“That will be a lot more transparent and a lot more accountable,” he said.

Mr Edwell acknowledged that renewable energy providers currently found it difficult to participate in the market.

“We will endeavour to ensure we remove any biases against renewable energy players,” he said.

The success of these initiatives could play a critical role in the entire reform process, since the Greens (WA) have vowed to block the electricity legislation unless there is greater support for renewable energy.

The Chamber of Commerce and Industry of WA welcomed the go-ahead for electricity reform, which it expects to lead to lower prices.

“Industry players are chafing at the bit to enter the deregulated market,” CCI chief executive Lyndon Rowe said.

In contrast, opposition leader Colin Barnett continued to be almost a lone voice questioning the planned changes.

“The Government plans to make Western Power fund most of the cost of the break-up and then take even more money by increasing the percentage of dividend or tax it makes Western Power pay,” Mr Barnett said.

“This will leave the corporation unable to sustain maintenance programs and transmission upgrades that are essential to ensuring reliability of electricity supply.”