Electricity privatisation to hit regional power prices hard

Tuesday 28 Oct 2014

Regional power prices are set to skyrocket in the Pilbara, Kimberley, Gascoyne, Mid West and southern Goldfields when the Barnett Government privatises electricity assets in the State’s South West.

Treasurer Mike Nahan has indicated that the State Government will look to sell electricity assets to reduce State debt, and has been backed by Synergy in its submission to the State Government’s Electricity Market Review.

Synergy also called for an “examination” of the Tariff Equalisation Charge (TEC).

The TEC is a long-standing State Government policy that sees all Western Australians charged the same price for electricity, no matter where they live. It involves electricity consumers in the South West, where the cost of delivering power is cheaper, subsidising the cost of delivering power in the parts of the State not connected to the South West Interconnected System.

In its 2012 report into Synergy’s Costs and Electricity Tariffs, the Economic Regulation Authority called for the TEC to be abolished.

Electrical Trades Union (ETU) WA Branch Assistant Secretary Jim Murie said the TEC would not survive in a privatised electricity market.

“There is no way that any private company is going to buy electricity assets in the State’s South West, that come with a $180 million per year obligation to subsidise electricity prices elsewhere in the State,” he said.

“Both Synergy and the Economic Regulation Authority have flagged the TEC as needing to be abolished in the pursuit of privatisation, and we have no doubt this is what will happen if the State Government gets its way.

“This will result in huge price hikes for electricity consumers in regional WA.”

The ETU has joined forces with the Australian Services Union (ASU) for a major public campaign to fight the planned privatisation of Western Australia’s electricity system.

“In the weeks ahead, we will launch a campaign website and advertising to inform the WA community about the electricity price increases and service quality problems that will be an inevitable consequence of privatisation in electricity,” Mr Murie said.

“We will encourage the WA community to use the power they possess at the ballot box to stop the Liberal / National Government’s privatisation plans.”