- WA's State-owned electricity generator Verve and retailer Synergy to merge
Merger will improve efficiencies in electricity production in Western Australia
Will help create efficient market that delivers cost-effective, reliable and safe energy
The State Government has today announced Western Australia's State-owned electricity generator Verve and retailer Synergy will be merged to form a single entity.
Making the announcement today, Premier Colin Barnett said the changes to Verve and Synergy would deliver improved efficiencies in electricity delivery.
Energy Minister Mike Nahan said the first step in the establishment of this new entity, to be known as Synergy, was to install a single Board of Directors by July 1, 2013. Legislative changes will then be required to integrate Synergy and Verve into a single Government trading entity with two ring-fenced business units (generation and retail) by January 1, 2014.
"This merger is the first step in the process to put in place an efficient energy market that delivers cost-effective, reliable and safe energy for all West Australians," Dr Nahan said.
"The State Government will also, in consultation with industry, review the market rules and the functioning and design of the Western Australian Wholesale Energy Market as well as the role of the Independent Market Operator (IMO) to identify and address existing deficiencies in the market.
"The design and operation of the current electricity market in the South-West grid is not functioning properly and has contributed to higher electricity prices.
"During its first term, the Liberal National Government made incremental improvements to the structure of the market and these changes reduced the cost to the State by approximately $1billion. It is now apparent that major changes to the structure, conduct and performance of the market are required.
"We cannot maintain the status quo any longer.
"The electricity price rises consumers have had to contend with over the past four years were necessary to enable the electricity sector to offset the financial impact of significant cost pressures, a long period of fixed electricity tariffs and fundamental flaws in the design and operation of a competitive market.
"The State's electricity sector faces a range of cost pressures, some of which are outside Government's ability to influence, such labour rates and the cost of capital equipment.
"In contrast the Government is able to address the cost pressures resulting from the short comings of the existing electricity market structure in the South-West grid, and we are taking action."
Fact File
Minister's office - 6552 5700
