WA politicians divided over electricity competition

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Despite thriving competition in the state’s gas market, households in Western Australia will remain stuck with just one electricity retailer for the foreseeable future, with the treasurer and energy minister softening his plans to end the monopoly.

Ben Wyatt has been accused of curbing his support for more competition in the WA electricity market in a bid to appease unions, leaving Synergy as the sole retailer in the state.

The debate has created a political divide in Western Australia, with shadow minister for energy, Dean Nalder, insisting that the electricity market should follow the example of the state’s gas industry where competition has resulted in cheaper prices for customers.

“The treasurer is publicly on the record as stating that he will open up the North-West electricity grid to competition because competition will drive down prices for consumers. It will lead to cheaper prices,” Mr Nalder said.

“People can pick up the phone and call suppliers of gas and get discounts up to 35 per cent.”

Mr Nalder told reporters in WA that he has serious concerns Mr Wyatt has backtracked to appease unions. He denied that WA would see the same rocketing electricity prices which plagued the east coast, which he blamed on the closure of coal powered stations and renewable energy.

Mr Wyatt said there are a range of policies and regulatory changes that need to be considered before any changes to the electricity market can be made.

“It’s not as easy as simply saying let’s open it up to everybody. What we’ve learnt from the eastern states is often that the consumers aren’t the ones to benefit,” he said.

Mr Wyatt added that the WA government had learned from the Victorian model where there is a “free market free-for-all”.

“The benefits were retained at wholesale level, they were not passed onto the consumer,” he said.

Gas competitions heats up in WA

While Synergy remains the only residential electricity provider in Western Australia, households can now choose from four different gas suppliers, with further competition coming soon.

Natural gas prices remain regulated by the state government, but with competition now allowed, Kleenheat, AGL and Origin have all entered the market to challenge the dominance of the previous incumbent, Alinta Energy. Simply Energy has also announced its intentions to move west later this year, while local business retailer Perth Energy also looks set to launch a residential offer in the near future.

A recent Canstar Blue survey of gas customers in WA found that 28% have switched suppliers in the last two years. Of these, seven out of ten (71%) said switching has proved a good financial decision, while 14% were not convinced it was worth it and a further 15% said it was too early to tell.

Of those who haven’t switched in the last two years, the majority (53%) said they are happy with their existing gas supplier, while 29% would like to switch but haven’t found the time and a further 22% haven’t switched because they find the process too complicated.

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