Political power battle

THE business lobby has roundly criticised the Liberal Party’s decision this week to oppose the full break up of Western Power.

Liberal MPs have endorsed limited reforms, including the separation of Western Power’s transmission business from the rest of the utility.

However, they are opposed to the splitting of Western Power’s generation and distribution businesses – a move that reform advocates say is critical if the full benefits of deregulation are to be achieved.

Opposition energy spokesman John Day said the party opposed the break up “because the Government has failed to present any evidence of benefits from the move to residential and small business customers”.

“On the contrary, taxpayers will be slugged $153 million up front and $26 million a year in ongoing costs to establish and run four new electricity bureaucracies.

“We also have great concerns about the security of electricity supplies if Western Power is broken up because the move will significantly reduce the utility’s capacity to undertake maintenance work and infrastructure investment.”

Chamber of Commerce & Industry director Bill Sashegyi said the decision was “very disappointing”.

“There are very serious flaws in their arguments,” Mr Sashegyi said.

He said the Liberal proposal would block out independent generators “and absolutely will ensure the benefits don’t flow through to small business”.

Mr Sashegyi said the “vast majority of costs” would still be incurred under the Liberals proposal yet the benefits would be significantly lessened.

Like the CCI, the Chamber of Minerals and Energy is a firm supporter of the Government’s planned reforms.

Alinta spokesman David Franklyn said there were some positives including the separation of transmission.

However, he expressed concern about the market power of an integrated and dominant generation and distribution business.

“That is a fundamental concern that needs to be addressed,” Mr Franklyn said.

A spokesman for Energy Minister Eric Ripper said the Government would push ahead with the current package in its totality.

“We are still hopeful of support in the upper house,” the spokesman said.

It is possible that some Liberal MPs may ‘cross the floor’ to vote with the Government in the upper house.

Liberal MLC George Cash, for instance, has previously spoken in favour of breaking up Western Power but could not be contacted for comment this week.

Another possible source of support are the Greens, who hold five seats in the Legislative Council.

Greens energy spokesperson Robin Chapple has criticised the Government’s reform plans but he and his colleagues have not finalised their position.

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