ELECTRICITY market deregulation is crucial to make WA’s businesses more competitive, says Chamber of Commerce and Industry industry development officer John Rampton.
Mr Rampton said WA had high electricity costs compared to other states.
“There is great demand among our members for cheaper electricity,” he said.
“WA’s generation costs are particularly high.
“Our base load power is supplied by coal which is particularly expensive in WA.”
CCI manager industry and resources Bill Sashegyi said improved communications and transport infrastructure was putting pressure on WA’s power system.
Mr Sashegyi said a concentration of manufacturing infrastructure was forming on Australia’s east coast, due to the productivity benefits available.
“WA has to be competitive with its power costs or businesses are going to move to the east coast and supply their WA markets from there,” he said.
Mr Rampton said more electricity market competition was unlikely under the present WA Government.
The Government deregulated the electricity market down to one megawatt on January 1.
Energy Minister Colin Barnett has foreshadowed a further deregulation to allow customers using 230 kilowatts per year to choose their electricity supplier from July 1.
However, he has not committed to this.
“WA has to be competitive with its power costs or businesses are going to move to the east coast and supply their WA markets from there.”
– Bill Sashegyi
Mr Rampton said it was difficult for competitors to break into WA’s electricity market.
“An independent power supplier is not going to come in and make a major investment on the off chance they’ll get a couple of customers,” he said.
“Access to Western Power’s transmission system is also a problem.”
Independent generators in Kalgoorlie want to transmit power back into the South West Interconnected System.
However, problems exist that prevent power from being sent from Kalgoorlie back into the SWIS.
Western Power expects an interim solution to the problem could be available by the end of the month.
Mr Rampton said a market or pool mechanism had to be set up to make it attractive for independent generators to enter the market.
Western Power controls 98 per cent of the generation to the SWIS.
This is also a disincentive to potential competitors.
Mr Rampton said the Chamber advocated an independent procurement process.
“Western Power should go out to the market and seek tenders to find the best deal for power generation,” he said.
“They should be allowed to tender to, because they may be able to provide the cheapest price for electricity.”
