CURRENT GOVERNMENT REFORM PROGRAM
The WA IPA will continue to work with Government and all major political parties to achieve positive results for the future of private investment in the local energy sector. Our members are able to bring valuable ‘real life’ operating knowledge and experience to the development of energy market policy.
Reforms should build on the market established in 2006 to enhance competition, put downward pressure on prices and reduce government involvement in the sector. Investments made in the market since 2006 should be considered and reforms should only minimally disrupt business as usual market operations.
The WA IPA calls for the following key reforms and principles to be implemented in a timely manner:
- Electricity tariffs should continue the path to cost reflectivity (this is in-line with the reforms outlined by the Minister for Energy in March 2015 although it is unclear what the precise timeframe is);
- The retail electricity market should be opened up to Full Retail Contestability (FRC) (The State Government says Western Australians should be able to buy electricity for their home from suppliers other than Synergy by 2020);
- The capacity mechanism should be retained but made more responsive to market needs; and
- Move to a constrained access model for networks that allows a level playing field for all power producers (government and privately owned) to make informed decisions about when and where they add additional loads and generators to the system. The current system, under which private operators must apply to Western Power to add capacity is very lengthy, bureaucratic and costly.
Implementing the above reforms and principles would result in increased competition in the electricity market and reduced barriers to entry to the sector – for the ultimate benefit of power consumers via increased choice and downward pressure on prices.
The Association firmly believes that any future reform of the market should be achieved with bi-partisan support, to ensure stability for the State’s growing independent power sector.
The WA IPA believes that substantial investment in power generation infrastructure is required in Western Australia over the coming decades. The private sector has shown a willingness to make those investments, provided there is fair and open competition. The WA IPA supports the E stated aim of reducing and ultimately ceasing the State Government’s involvement in building any further power generation assets.