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Western Power is the state government owned entity which operates the South West's electricity network. Photo: Attila Csaszar

Western Power aims for $1bn savings

Western Power plans to reduce spending by nearly $1 billion in the next five years compared to the five years just gone, according to a proposal by the state-owned network operator to the state’s economic regulator.

The company submitted proposed financials to the Economic Regulation Authority as part of a process to determine the level of capital investment, revenue and spending it is allowed to undertake in what is known as an access arrangement.

The upcoming arrangement, lasting from 2018 to 2022, will be the fourth period where financials are determined by the process, with the ERA having the ability to order further tightening of the screws if it deems Western Power is pushing up prices by not being efficient enough.

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Comments

Kalamunda
While it is commendable that Western Power will seek to achieve operating reductions over the next five years, it is disturbing to note that capital costs will also be reducing. Significant capital underspend was a feature of Western Power management under the Labor governments led by premiers Gallop and Carpenter. History shows us that this usually means reduced maintenance and upkeep of the ever expanding network in WA. The previous government had to undertake a major capital works replacement of poles and wires that had been systemically under-maintained. It looks like Labor has learned none of its lessons.

Interesting points Stewart - very valid. I think in this case the lower capital cost will largely be driven by increased use of technology. The cost saving would be in moving to microgrids rather than replacing the long parts of the network. Here's hoping!

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Total revenue

3rd↑Water Corporation$2.55bn
4th↓GESB$2.04bn
5th-Western Power$1.78bn
6th-Western Australian Treasury Corporation$1.54bn
7th-Lotterywest$885.2m
31 state government businesses ranked by total revenue - this year

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