Further step in deregulating power markets comes into force today

1/1/97

The next step in the deregulation of Western Australia's gas and electricity markets comes into force today, further opening up and creating more competition in the State's energy sector.

Energy Minister Colin Barnett said that there would now be more opportunity for companies to access both the State's gas transmission and distribution systems and Western Power's high voltage electricity transmission system.

Mr Barnett said the Electricity Transmission Regulations, which came into force today, provided the terms and conditions under which private generators and electricity consumers would be able to gain access to Western Power's high voltage transmission system (66 kilovolts and above).

Large electricity consumers would be free to enter into contracts either with Western Power, or a private sector generator, to purchase electricity which would then be supplied directly from Western Power's 66kV transmission system.

Mr Barnett said that customers consuming more than 500 terajoules of gas per annum at a single site, supplied from the gas transmission or distribution systems, would now be able to choose their gas supplier for use on that site.

The Minister said the success of energy deregulation in WA so far had paved the way for these next steps of reform to be put into place.

"The main drivers of energy deregulation in the State are cheaper power and competition in the industry," he said.

"Western Australia, particularly the resources industry, is seeing the benefits of energy deregulation and the Government is committed to ensuring that this continues."

The Minister said that under the new open access regime in the electricity market, 12 of Western Power's largest customers, subject to their existing contracts, would be eligible to negotiate directly with the electricity supplier of their choice from today.

Open access to the electricity transmission system would provide increased competition for the supply of bulk electricity to large industrial and mining companies.

"The new access regime will also provide a stimulus to the development of private sector generators, such as the recently commissioned Parkeston Power Station at Kalgoorlie and the Pilbara Energy Project," Mr Barnett said.

Open access to the electricity transmission and distribution systems will occur in stages from today. The schedule will be:

January 1, 1997 - access to Western Power's high voltage transmission system for all consumers taking supply directly at 66kV and above;

July 1, 1997 - to consumers with an average load exceeding 10 MW at a single point;

July 1, 1998 - to consumers in the Pilbara, Eastern Goldfields and non-interconnected areas with an average load exceeding 5 MW at a single point; and -

July 1, 1999 - to all other consumers with an average load exceeding 5 MW at a single point, including the above.

These arrangements will lead to more than 20 of Western Power's largest existing customers being provided with open access by mid-1999.

Mr Barnett said there had been extensive industry consultation on the reforms to the electricity industry. He congratulated representatives of the Electricity Transmission Access Consultation Committee, (including Western Power, the Office of Energy and electricity producers and consumers), for their efforts in preparing the Electricity Transmission Regulations.

"The issues that arise when providing open access are complex and as a result, they will be constantly monitored," the Minister said.

"The Consultation Committee will also continue to meet for at least another six months to oversee the implementation of the new regime."

Mr Barnett also said that from today, under the next phase of gas deregulation, 91 per cent of gas sold in WA would be able to be sold in the private market.

"Major energy users are now free to directly enter into contracts with the gas supplier of their choice, as opposed to being required to deal solely through AlintaGas," he said.

"This next stage in the deregulation process will stimulate further competition in the gas market and demonstrate the Government's commitment to lowering energy prices."

Mr Barnett said that from January 1 next year, access would be made available to customers consuming at least 250 terajoules per annum at a single site and, from January 1, 2000, to customers consuming at least 100 terajoules per annum at a single site.

"When the final steps of deregulation are in place, AlintaGas will be the sole supplier of gas to the small business and householder markets, but all other markets will be open to competition, which will represent 94 per cent of total gas sales in WA," he said.

"The Government is committed to further energy market reforms and will be examining options to accelerate the process while maintaining the viability of the State's electricity and gas corporations."

Media contact: Justine Whittome 222 9699