Government business

WESTERN Power’s move into telecommunications is likely to stir up a hornet’s nest, mainly because of the issue of government involvement in business.

While it makes a great deal of commercial and logistical sense for the utility to piggyback cable or conduit for telecommunications purposes on underground power lines, closer examination raises some key issues.

Firstly, there is the obvious consumer issue.

Generally, converting to underground power costs the consumer. They might argue that they are due to share in anything that could defray the cost of this process.

That argument could be taken a step further. The addition of telecommunications conduit could bring underground power to more suburbs sooner by making the process cheaper, particularly if third parties were willing to underwrite part of the cost.

The next issue is more of an issue for business.

Should what is a State Govern-ment corporation compete with the private sector in an area that is generally considered pretty competitive?

The possibility that Western Power could offer telecommunications services when it operates in a heavily regulated energy market could be construed as unfair.

Of course, this is not Western Power’s fault.

By corporatisation, the utility is effectively told to go an act like a private company. Laying conduit is simply a clever initiative, which for little up-front cost, could offer some significant new markets or at least some one-off profits in the future.

But Western Power is not private.

It has all sorts of rights and obligations that are unusual in the commercial sector.

It could argue that, with its main competitor AlintaGas already privatised, it is fighting with one hand behind its back as a State-owned body. Others could argue that few private companies have the ability to lay kilometres of conduit around suburbia, largely unnoticed.

Perhaps it is time the WA Government reconsidered selling the utility and putting it on an equal footing with its main rival.

There is no reason why Govern-ment should own energy infrastructure.

So long as it is regulated well and there are incentives for adequate planning, power generation is simply another business.

Another issue is the argument about piggybacking on other infrastructure.

While consumers may feel miffed when they have little choice in forking out for underground power only to find that Western Power could make some money out of it in the future, that is the way business works.

Taking an airline flight, sending a parcel … just about anything you do piggybacks off or subsidises someone using the same service.

Finally though, there is the conspiracy theorist’s point of view — that is, concern about a Government-owned utility secretly running communications cables up to people’s houses.

Try that one in America, where paranoia about State control is a little higher than here.

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