Regulatory reform to the Pilbara electricity system

The Western Australian Government has announced it will address ongoing uncertainty in the region by designing a fit for purpose regulatory framework and system operator for the Pilbara’s North West Interconnected System.

“The Pilbara region is a significant driver of the state’s economic and export performance, yet it labours under an electricity system that is fragmented, high-cost and uncompetitive,” a statement from Energy Minister Ben Wyatt said.

“The objective of this work is to implement a light-handed regulatory regime that facilitates fair and reasonable access by third parties to Horizon Power’s electricity network in the North West Interconnected System.”

Third party access to the network has been an issue for some time, with Alinta Energy submitting a coverage application under the Electricity Networks Access Code 2004 in 2014, which was subsequently withdrawn in the hope of a negotiated outcome with Horizon Power.

Mr Wyatt said he expects to be in a position to take a detailed reform proposal and implementation plan to Cabinet by March 2018.

“I look forward to engaging with industry and other stakeholders to design and implement an effective regulatory regime for the North West Interconnected System in the Pilbara,” he said.

The Public Utilities Office has been asked to begin work on the design of a new regulatory framework and associated arrangements.

The intention is to finalise details of the new framework by early 2018.

Alinta Energy CEO managing director Jeff Dimery welcomed the announcement and said open access in the Pilbara would deliver positive outcomes for customers.

“Every day that customers in the Pilbara are waiting for this reform, is another day that they are missing out on the benefits of discounted electricity offers,” Mr Dimery said.

“Alinta Energy has signed up a number of customers in the Pilbara in anticipation of open access and these customers continue to wait to take advantage of the savings available in a competitive environment.

“Despite several years of attempts by Alinta Energy, we have not been able to secure access to the poles and wires to allow us to supply electricity to customers in the region.”

Mr Dimery said while Alinta Energy is supportive of a government-led process to ensure open access, Alinta Energy has also submitted an application to the state government seeking coverage of Horizon Power’s Pilbara network.