The Sustainable Energy Association of Australia (SEA) has continued its call against re-mergers in Western Australia’s energy industry, a possibility flagged by the Barnett government.
The SEA has consistently opposed a re-merger of Synergy and Verve, stating monopoly operations create barriers to developing a competitive market in Western Australia.
“Energy market reforms leading to the desegregation of Western Power in 2006 were strongly supported by industry to create a competitive market, and those reforms are not yet complete,” said Professor Ray Wills, Chief Executive of the SEA. “If the Premier was to carry out a re-merger of Verve and Synergy, the likely outcome will be to re-establish barriers to market entry and be a disincentive for private sector investment in Western Australia’s energy markets.”
In 2006, the Labor government split Western Power into four energy utilities. However, Premier Barnett has said the break up was ineffective in creating competition between Verve and Synergy; resulting in higher electricity prices.
The Chamber of Commerce and Industry Western Australia (CCI) strongly disagrees with the Premier’s assessment. In a statement issued yesterday, the Chamber stated the announcement “is a complete u-turn on 15 years of reform of energy utilities” and that it such a re-merger is likely to cost taxpayers more.
“This is a return to the failed policies of the past. It is a mistake to believe that Government can produce and supply electricity more efficiently than the private sector,” said CCI Chief Executive James Pearson.
Mr. Pearson says no consultation with the business community, which is the major customer and biggest private investor for the energy sector, has occurred.
Western Australia’s Opposition Leader, Eric Ripper says the move is a distraction, designed to shift focus from rising power prices, which jumped another 5% in July this year.
“The Government has killed the solar industry, now they’re going to paralyse other private sector generation investment,” said Mr. Ripper.
Western Australia’s solar feed in tariff installation quota was reached in August and the program suspended for new connections, leading to a significant slowdown in Western Australia’s home solar power industry.
However, Synergy and Horizon Power are continue buying excess electricity fed into the grid from all residential solar power systems under the State Government’s Renewable Energy Buyback Scheme; albeit at a greatly reduced rate compared to the previous program.
According to information posted on solar solutions provider Energy Matters’ web site, under current arrangements, an entry-level 1.44kW solar power system installed in Perth still offers a financial benefit of approximately $480 annually.
