Privatisation by stealth
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Tuesday, 22 October, 2002 - 22:00
THE proposed break-up of Western Power has been welcomed by the business community – with the potential for big savings for customers and the opportunity to grab market share for energy players.
I, too, have no doubt that we will be better off without a monopoly electricity supplier.
However, I think it is important that the State Government spells out exactly what it is giving away in terms of market value if it decides to split Western Power and handcuff its remnants in the interest of inviting competition.
This government may well be against privatisation, but simply reducing a dominant player to a series of smaller suppliers of last resort (as well as a network system) is effectively privatisation by stealth.
I am not objecting to that; I just want to make sure that if new entrants are being subsidised by the community – that is what effectively takes place when you give away market share in the way recommended by the Electricity Reform Task Force – that the community understands the situation.
Quite frankly, if you want competition, then the task force’s suggestion is a good formula. Hopefully, this competition will result in cheaper prices as promised and the development of new energy generation to replace uncompetitive and inefficient operations.
I just wonder why a real privatisation, where the money is put on the table as an asset sale, was not considered. It is far more transparent than leaving the weakened remnants of a State organisation to be whittled away slowly until there is nothing left but a few community service obligations no-one in the private sector wanted anyway.
I, too, have no doubt that we will be better off without a monopoly electricity supplier.
However, I think it is important that the State Government spells out exactly what it is giving away in terms of market value if it decides to split Western Power and handcuff its remnants in the interest of inviting competition.
This government may well be against privatisation, but simply reducing a dominant player to a series of smaller suppliers of last resort (as well as a network system) is effectively privatisation by stealth.
I am not objecting to that; I just want to make sure that if new entrants are being subsidised by the community – that is what effectively takes place when you give away market share in the way recommended by the Electricity Reform Task Force – that the community understands the situation.
Quite frankly, if you want competition, then the task force’s suggestion is a good formula. Hopefully, this competition will result in cheaper prices as promised and the development of new energy generation to replace uncompetitive and inefficient operations.
I just wonder why a real privatisation, where the money is put on the table as an asset sale, was not considered. It is far more transparent than leaving the weakened remnants of a State organisation to be whittled away slowly until there is nothing left but a few community service obligations no-one in the private sector wanted anyway.