One of the Barnett Government's key energy advisers has urged it to quit the electricity generation and retail markets, saying once fully merged, Verve and Synergy should be split and sold as separate "gentailers" as soon as possible.
Mark Chatfield, an energy expert on the board merging the utilities, said yesterday the break-up of the old Western Power was a costly failure which would only get worse.
His personal view was that the electricity market's current design had pushed up costs to the extent they were hurting business and the broader WA economy.
Mr Chatfield said the Government should reform the electricity system to make it simpler and more efficient for participants.
It should then split the new Synergy into two or more "gentailers" to generate and sell power before privatising the companies to fuel competition and free up funds.
"Measured in terms of the resulting impacts in electricity charges the (Western Power split) has been a failure," Mr Chatfield said at a Committee for Economic Development of Australia conference.
Splitting and selling the recombined generation and retail entity to several players would provide a stable environment to investors and minimise costs and risks.
Mr Chatfield said though it was time to be bold, there was "a real danger" the Government would recombine Verve and Synergy then see what happened for a few years.
Energy Minister Mike Nahan said the Government would not leave power generation and retail while it continued to subsidise costs but indicated he wanted it to exit the contestable market for big users. It would do this by retiring old plant when possible, not renew contracts and consider making more consumers eligible for the contestable market.Dr Nahan said the focus was on lower power costs for households before full retail competition.