25/11/2003 - 21:00

Power price gap concern

25/11/2003 - 21:00


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Power price gap concern

WHILE the major political parties bicker over whether Western Power should be fully broken up or only its network and regional operations separated out, the price differential between Western Australia and New South Wales and Victoria continues to grow.

According to the submission from two major business lobbies the Chamber of Commerce and Industry and the Chamber of Minerals and Energy, large WA businesses are paying 54 per cent more for power than their Victorian counterparts and 63 per cent more than their NSW competitors.

In 1996-97 WA large businesses were paying about 30 per cent more than their Victorian and NSW competitors.

WA small businesses are paying 9 per cent more for their power than those in Victoria.

Ironically, in 1996-97 Victoria’s small business electricity price was higher.

The price gap with NSW small businesses is 50 per cent – in the NSW small business sector’s favour.

In the joint chambers submission there are some case study prices showing the price differentials they face.

One company operated rock quarries. It was paying 108 per cent more for its power than in NSW and 45 per cent more than in Victoria.

A food manufacturing company found that it was paying 75 per cent more than in NSW and 60 per cent more than in Victoria.

A Retailer found it was paying 49 per cent more in NSW and 37 per cent more than in Victoria.

CCI director industry policy Bill Sashegyi said the cost differences showed that electricity change was needed.

For that to work, he said, Western Power had to be broken into four separate entities.

"If we separate out networks and the regions, it will still leave a powerful generation and retail entity that will stifle the efforts of both independent generators and retailers to enter the market," he said.

Independent energy retailer – possibly soon to enter the generating market as well – Perth Energy director Ky Cao said failing to break up Western Power would leave large problems for the State.

He said without the break up a lot of companies that were considering investing in power infrastructure would look elsewhere.


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