Wyatt opens up Pilbara electricity market

The state government has opened up the Pilbara electricity market to greater competition after privately owned retailer Alinta Energy applied last year to gain access to state-owned Horizon Power’s network.

Under regulatory changes announced this afternoon, Horizon Power will be obliged to facilitate third-party access to its Pilbara grid.

The government said this would enable electricity retailers to enter the Pilbara electricity market, and made it easier for generators to connect to the network.

The changes follow long-running debate about the lack of an open network in the Pilbara, where many power stations are not connected to the grid and there is significant excess capacity.

The region has both high capital outlays on generation capacity and high prices.

Horizon Power’s Pilbara electricity network stretches from Karratha to Port Hedland, serving about 16,000 customers.

Today’s decision means that Horizon Power’s Pilbara network will be regulated by the Economic Regulation Authority, in the same manner as Western Power’s network in the South West.

Coverage will commence on January 1 2020, with Treasurer Ben Wyatt saying that a range of policy considerations would flow on from the decision, with the government to work through them in the next two years.

Last year, Mr Wyatt had flagged a cabinet decision on third-party access would be made by March 2018.

It comes nearly four years after Alinta first moved to access the network, an application that was later withdrawn as the company hoped to negotiate an agreement with Horizon.

In 2015, a review led by former Synergy chairman Lyndon Rowe recommended a light-handed regulatory scheme, seperate network ownership and an independent operator to run the system.

As treasurer, current opposition leader Mike Nahan proposed to privatise Horizon’s transmission network in the Pilbara, to raise $800 million and tick off one of those recommendations.