New set of initiatives for energy sector announced

27/11/97

Reform in Western Australia's energy sector took another important step forward today with a new set of initiatives announced by the State's Energy Minister Colin Barnett.

In Parliament today, Mr Barnett outlined an acceleration of the rate of access to AlintaGas and Western Power's transmission and distribution systems and implementation of reforms relating to the sale of liquefied petroleum gas (LPG).

The Minister said phased access to Western Power's distribution system began on July 1 this year with access for customers with loads at 10 megawatts (MW) and above. This was to move down to 5MW in the Pilbara and eastern Goldfields from July 1 next year and 5MW or greater in the remainder of the State from July 1, 1999.

Access to the South-West gas market commenced with customers using at least 1,000 terajoules (TJ) per year at a single site being able to contract directly with any gas supplier from January 1 last year. This level dropped to 500TJ per year on January 1 this year, with further deregulation down to 250 TJ per year to take place on January 1 next year and down to 100 TJ per year on January 1, 2000.

"The Government is now accelerating the rate of access to AlintaGas and Western Power transmission and distribution systems and implementing further energy sector reforms," Mr Barnett said.

"In electricity, from July 1 next year, customers with an average load of 5MW at a single site will be able to negotiate with the supplier of their choice.

"This will be opened up to all 1MW customers in the State by January 1, 2000, enabling more than 100 large customers, such as hospitals, large office buildings, factories and mining companies, to buy their electricity from either Western Power or a private supplier."

The Minister also said that in gas, the Government had committed to a process which would, from January 1, 2002, enable access to gas transmission and distribution systems for customers taking 1 TJ per year and see unrestricted competition down to the household level by July 1, 2002.

"This will allow all natural gas customers in all parts of the State to then negotiate with the supplier of their choice," Mr Barnett said.

"Further, legislation will be introduced into State Parliament next year to give effect to adopt the National Third Party Access Code for natural gas pipeline systems. This will bring competition benefits to the users of these pipelines."

Mr Barnett said the Government's energy reform initiatives, which began in earnest in 1995 with the renegotiation and disaggregation of the North West Shelf gas contract, had delivered enormous benefits to the State through increased competition in the energy market.

"These reforms have produced benefits, including head-to-head competition between the gas and electricity industries, the fall of gas prices in the Pilbara by 50 per cent which has encouraged new downstream processing opportunities, and a large amount of private sector investment in new electricity generation opportunities, particularly in the Pilbara and Goldfields."

The Minister said the Government had also moved to remove restrictions on the sale of LPG to allow other suppliers to enter into direct competition with AlintaGas.

"Beginning next year, small and medium-size businesses will benefit from LPG suppliers and AlintaGas competing to offer them the best service at the lowest prices," he said.

"I believe AlintaGas is sufficiently robust to withstand direct competition, particularly in the small business area, with LPG suppliers."

Mr Barnett said the Government would continue to review the effectiveness of the State's energy reforms in encouraging competition.

"The Government considers it important that electricity and gas businesses compete, not only among themselves, but with each other to supply the energy needs of all Western Australians," he said.

Copies of the Minister's statement to Parliament are available on (08) 9222 9699

Media contact: Justine Whittome (08) 9222 9699