ERA slams Barnett record
The State's economic regulator has taken a big swipe at the Barnett Government's energy credentials, accusing it of putting its interests ahead of consumers' and failing to reform the market.
In a damning critique of the Government's stewardship of the energy portfolio, the Economic Regulation Authority said the Government had exaggerated the amount of excess capacity in the grid and overpromised on its ability to cut costs.
The ERA comments were contained in a submission to a review of WA's electricity system.
As part of its submission, the watchdog agreed with concerns raised by the review committee that costs in the South West power network were too high and that too much capacity had been procured.
The ERA was scathing of the Government's handling of the sector, saying it and the former Carpenter government had failed to progress market reform since Western Power was split in 2006.
ERA board member Steve Edwell, the inaugural chairman of the Australian Energy Regulator, led the charge after the authority's chairman, Lyndon Rowe, last month accepted Colin Barnett's offer to run electricity provider Synergy, born from the re-merger of Verve and Synergy.
Mr Edwell, in a cover letter to the ERA's submission, claimed the Government had made matters worse for electricity users by prioritising the interests of State-owned utilities such as Synergy at the expense of others.
"The ERA considers that the original Western Australian market design was a good first step given the circumstances," he said. "Unfortunately, until recently, successive governments have not given the WA electricity market sufficient priority to make the changes in policy settings to refine the market.
"Compounding this has been the focus of the government on financial improvements to its own businesses at the expense of real market reform.
"The ERA considers there is an unavoidable conflict of interest for government as an owner of assets, particularly in markets where the government-owned businesses are competing with private sector companies.
"Governments will always be tempted to intervene in markets when their businesses lose money."
The ERA said the most "pressing problems" to be fixed were the dominance of power provider Synergy and the conflicts of interest stemming from the Government's ownership.
