Search

Power tariff change a boost for business

THE WA Government’s proposal to abolish the differential electricity tariff for businesses not connected to the South West Interconnec-ted System should benefit regional small businesses.

Businesses using more than 300,000 kilowatts of power each year in areas outside the SWIS, such as Esperance, Norseman, Laverton and Menzies, were hit with a differential tariff three years ago.

That meant they were paying 20 cents for each unit of electricity rather than the 16 cents charge available to SWIS-connected businesses.

The differential tariff regime was created in answer to the Federal Government removing the diesel fuel rebate from power station fuel oil.

The return of the uniform electricity tariff to regional electricity customers using more than 300,000 kilowatts per year will immediately help about 50 big customers, including fish processing factories, assay laboratories and some farms.

According to Western Power, about 40 commercial customers were consuming between 200,000 kilowatts and 300,000 kilowatts per year and risked higher charges if they expanded their power consumption.

Most small businesses do not draw that much electricity but their payoff is expected to come from the increased investment the reduced tariff is likely to generate.

Premier Geoff Gallop said there were about 5,500 commercial customers on the tariff schedules that could potentially benefit from the change.

These are businesses using more than 100,000 units of power a year that Labor claims could expand to require using more than 300,000 units a year.

Miles Cattle, an Esperance businessman and a member of the Power Users Action Group, said the removal of the differential tariff would be a big help for regional businesses.

“The differential tariff has been one of the greatest disincentives for people to invest in our regions,” Mr Cattle said.

“Now there is no discrimination in electricity. Existing industries will be able to expand without fear of hitting a higher electricity price bracket.

“The removal of this tariff also makes regional businesses more competitive.

“We lost some manufacturers from Esperance that had become completely discouraged by the tariffs.

“They ended up moving to Albany, which is part of the SWIS.

“I think former Energy Minister Colin Barnett is unplugged when it comes to regional issues.

“This was an issue Mr Barnett never wanted to recognise.”

The removal of the differential electricity tariff is expected to cost Western Power $2.1 million.

Mr Barnett said Mr Gallop had misled regional small businesses.

“The uniform tariff has always applied to regional householders and small to medium-sized enterprises,” he said.

Mr Barnett said the differential tariff had been introduced to encourage big regional businesses to enter into individual contracts with Western Power.

“The differential tariff was an attempt to conserve power in regional areas where Western Power was making a loss,” he said.

“Some of the big businesses there did negotiate more attractive contracts with Western Power.”

Chamber of Commerce and Industry manager industry and resources Bill Sashegyi said the key thing was for the Government to push forward with its Regional Power Procurement process that was bringing cost savings.

“It does raise the question of how the Government will fund the uniform tariff,” Mr Sashegyi said.

“It gives rise to community service obligations, and how the whole thing is funded is something the Government needs to address in the near future.”

Add your comment

BNIQ sponsored byECU School of Business and Law

Students

6th-Australian Institute of Management WA20,000
7th-Murdoch University16,584
8th-South Regional TAFE10,549
9th-Central Regional TAFE9,064
10th-The University of Notre Dame Australia6,708
46 tertiary education & training providers ranked by total number of students in WA

Number of Employees

BNiQ Disclaimer