Review seeks reforms to Western Australia’s electricity market

The Western Australian Government has established an Electricity Market Review to address the long-standing problem of rising electricity costs.

The WA electricity industry faces the challenge of stagnating electricity demand as consumers become more self-reliant through the use of private solar energy systems, along with excess capacity in the market.

Energy Minister Mike Nahan said the review would identify changes to the sector that were necessary to ensure three government objectives – lower electricity prices, reducing the government subsidy to Synergy and increased private sector investment – could be achieved.

Dr Nahan said the review is a critical step in the reform process to improve efficiency, cost competitiveness and transparency in the electricity industry and to reduce the burden on taxpayers and electricity consumers.

“This review is required to ensure the sustainability of the electricity market in the South West Interconnected System, while winding back the high levels of government support, currently ballooning to more than $500 million a year and rising,” he said.

“It will look at ways to arrest increases in electricity costs that the community has borne for several years.”

The Minister said he encouraged private participants in the electricity sector to be part of the groundbreaking review.

“It is important all participants have strong, competitive incentives to minimise the costs of providing electricity services, while ensuring sufficient investment occurs for the long-term security of electricity supplies,” he said.

The Review Steering Committee will be chaired by independent consultant Paul Breslin, along with committee members Dr Ray Challen, Deputy Director General, Department of Finance; and Nicky Cusworth, Deputy Director General, Department of State Development.

The steering committee is due to report to Dr Nahan by the end of October 2014.