The State Government has further delivered on its promise to deliver efficiencies in the electricity market with State-owned retailer Synergy and generator Verve officially merging today.
Energy Minister Mike Nahan said the merger of the two corporations to form one single entity, trading as Synergy, was the latest State Government initiative designed to reduce the impact of a series of unintended and highly inefficient outcomes that resulted from splitting up Western Power in April 2006.
"There is no doubt the disaggregation of the former Western Power has contributed to higher electricity costs in the South-West grid through duplicating functions, increasing overheads and destabilising the balance sheets of Synergy and Verve Energy," he said.
"The State Government made the tough decision to merge the two entities because we are committed to electricity industry reform and ensuring State Government-owned businesses deliver value to the people of Western Australia. I am pleased to announce that due to the considerable efforts of many people, the new Synergy is now in business."
"While it will take time, in conjunction with broader market reforms, for the full benefit of the merger to be realised, we have already delivered efficiencies through the implementation of a single board of directors and by combining two trading desks into one.
"Synergy's customers won't notice any change to the way they receive or pay their bills. The merger is simply about driving down costs.
Dr Nahan said the merger would not compromise service delivery, customer focus or the generation unit's commitment to workplace safety while shielding consumers from some of the increased cost burdens that have driven up electricity prices.
"The State Government continued to subsidise residential and small business electricity bills to the tune of nearly $500 per average bill last financial year," he said.
Former Verve Energy CEO Jason Waters will take over the reigns as CEO of the new Synergy effective today.
The Minister said the realisation of the new Synergy completed a significant year of energy reform undertaken by the State Government and heralded another year of driving costs and inefficiencies out of the electricity market.
"In 2014, we will continue to pursue our energy reform agenda. In the coming weeks I will outline the terms of reference and structure of a detailed examination of the electricity industry to flesh out areas that are inefficient, or of flawed design, which ultimately expose electricity consumers and taxpayers to unacceptable levels of cost and risk," Dr Nahan said.
Fact File
State Government announced merger of Synergy and Verve Energy on April 10, 2013
Merger has been completed within timeline set by State Government inclusive of required legislative changes
Minister's office - 6552 5700
