A State-owned electricity company has signed a lucrative business deal with the National Broadband Network - despite the Liberal Party's opposition to the multibillion- dollar communications project.

It has emerged that Horizon Power has struck an agreement with the Gillard Government's NBN Co to help install the telco's pipes in Karratha.

Installing the network's fibre cables is not part of the deal signed last year and worth $12 million.

It comes despite the Liberal Party's avowed opposition to the NBN as a waste of taxpayers' money.

In January, Federal Opposition Leader Tony Abbott described the NBN as "one of the all-time great white elephants" that "most people don't want, don't need and don't want to pay more for".

Horizon, which delivers electricity to remote parts of the State, confirmed a "mutually beneficial relationship" with NBN Co after talks began in 2010.

A spokeswoman said the discussions were prompted by Horizon's plans to replace overhead electricity infrastructure with an underground supply in cyclone-prone Karratha.

"Installing both conduits at the same time prevents excavations taking place again at a later stage," the spokeswoman said.

"Another advantage is that the consumer is only disturbed once because both conduits in their front yard or verge can be installed simultaneously."

A spokesman for Federal Communications Minister Stephen Conroy said the arrangement suggested the WA Government recognised the legitimacy and importance of the NBN.

"The WA Government is taking a constructive approach in building better infrastructure services," the spokesman said.

He said this was in stark contrast to the destructive approach of Mr Abbott who believed "investing in better broadband for the future of all West Australians is an absurdity".

State Energy Minister Peter Collier said he did not try to stop the deal because it would have been ludicrous to separate the works.