Nahan puts tariff reform on the table

A new-look tariff structure for energy consumers in Western Australia could be introduced from next year after the state’s government announced it would look into the issue.

Treasurer and Energy Minister Mike Nahan flagged the potential for changes to prices when he handed down the state’s budget in May. Mr Nahan had already announced in March a review of the electricity market and has now confirmed tariffs are going under the microscope.

“The government will also investigate the current structure of electricity tariffs, including options around rebalancing fixed and variable charges to ensure tariffs are fair and reflect emerging trends in consumer use,” he said.

“We will also review concessions to make them simpler and more equitable. This work will be completed in time for consideration by the government in next year’s budget process.”

His comments came amid the announcement of a 4.5 per cent increase in residential electricity tariffs on July 1.

Mr Nahan said the government was focused on reducing costs and the associated subsidy of providing electricity.

“Western Australian taxpayers are currently subsidising the provision of electricity by around half a billion dollars a year. Quite simply, this is not sustainable,” he said.

The review of the electricity market will assess the strengths and weaknesses of the generation, wholesale and retail sectors within the South West Interconnected System.

Mr Nahan said the ultimate aim is to reduce the government’s costs of producing and supplying electricity without compromising safety and reliability of supply.

“In addition, the government needs to reduce its exposure to energy market risks, which is why we are focusing on having future electricity generation being built by the private sector,” he said.

Mr Nahan said significant steps had already been taken, including reviewing Horizon Power’s business model and merging Synergy and Verve Energy into a single entity.