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Western Power focuses on profit

A FOCUS on increasing business value and reducing costs has helped Western Power record an after tax profit of $154 million for 1999-2000.

The profit is a jump of about 9 per cent on the previous year.

This is despite the company losing eight customers worth $12 million in revenue due to the deregulation of the 1 megawatt to 5MW market on January 1.

The market makes up 30 per cent of Western Power’s revenue.

Western Power managing director David Eiszele said the utility had expected to lose more customers as a result of the deregulation.

Mr Eiszele said the utility had also cut the average interest on its $1 billion debt to 7 per cent from the 9 per cent it was paying two years ago.

He said Western Power had reduced its long-term debt by $100 million.

The utility’s $26 million redundancy program has also been completed.

“We’ve brought the workforce down to a level we think is ideal,” Mr Eiszele said.

“We’ve also maintained the customer satisfaction level we had last year and did it while there was major change going through the organisation.”

Mr Eiszele said power tariffs would not increase beyond the amount needed to account for the GST.

Business customers have not experienced a tariff increase since 1992 and residential customers have only had one increase.

Electricity sales rose 2 per cent in 1999-2000.

Residential sales were the main driver, rising 8 per cent while industrial-commercial electricity sales were almost static.

Mr Eiszele said the jump in residential sales was largely due to the building boom sparked by the GST.

He predicted electricity sales in 2000-01 would be a little depressed and Western Power is expecting a sales increase of just 2 per cent.

The WA Government will gain a 13.6 per cent increase in payments from Western Power.

Payments are in the form of income tax equivalents, dividends and sales tax equivalents.

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