❓ The Minister for Energy updates the house on Western Power's efficiency savings and the government's efforts to reduce the cost of living, highlighting cost reductions in the electricity system and the move to the Australian Energy Regulator.
AnsweredQoN 70Legislative Assembly
QuestionView source ↗
WESTERN POWER — EFFICIENCIES
70. Mr S.K. L'ESTRANGE to the
Minister for Energy:
I note today's announcement
that Western Power has identified further significant savings for taxpayers.
Can the minister update the house on this and the Liberal–National
government's other major efforts to reduce the cost of living for Western
Australians?
70. Mr S.K. L'ESTRANGE to the
Minister for Energy:
I note today's announcement
that Western Power has identified further significant savings for taxpayers.
Can the minister update the house on this and the Liberal–National
government's other major efforts to reduce the cost of living for Western
Australians?
AnswerView source ↗
I thank the member for the question.
I know he is interested in this. When we came into government—before
the member for Churchlands, who came in more recently—we had a crisis
in the energy sector. Costs were going up significantly, subsidies were growing
significantly and we had to increase prices quite significantly, and this
government committed to tackling those issues. A wide-ranging reform has been
underway in driving efficiencies to Western Power, Synergy and Horizon. I might
add that Western Power is a particularly important asset and it accounts for 25
per cent of our stock of debt and has accounted for most of the growth in debt.
The largest source of growth in debt has been Western Power, for a range of
reasons, such as the midwest energy project, which put transmission lines
towards Geraldton into the Karara mine but, importantly, replaced thousands of
wooden poles, which cost over $1 billion. The management and board of Western
Power are committed to driving efficiencies, both off their own bat and because
of the fact that regulations in Western Australia and around Australia are
driving down regulatory allowances and costs. Western Power has committed to
$400 million in savings each year for the next four years at least, saving $1.6
billion. Western Power accounts for about 40 per cent of the cost of
electricity to households. Reductions in costs will transfer directly to
households and to subsidies and, I might add, to contestable consumers—businesses.
It is a significant reduction. It comes on top of reductions already announced
by Synergy of $450 million over the forward estimates, and $100 million for
Horizon Power. Over the four years to date, we have cut costs in the
electricity system—generation, Horizon and Western Power—by $2 billion.
It is a substantial reduction in costs, and we expect more to come.
We are not isolated, I might add.
One of the factors that has driven this is the announcement that we are moving
from having the Economic Regulation Authority as the regulator to the
Australian Energy Regulator. That process is underway, and we expect to bring
legislation before this house soon. In response to that, Western Power
benchmarked itself against the other states and found that it was substantially
over-cost, in both operating and capital costs. It also noted that the AER was
leading to substantial reductions in regulated allowance, in both capital and
the rate of return, across Australia. For example, new determinations have led
to reductions in pole and wire costs of five per cent in South Australia and
6.5 per cent in Queensland, and 12 per cent tariff reductions in Victoria.
Western Power recognises that same tendency happening here in Western Australia,
and it will be driving down costs to both Western Power and consumers. It is
extremely important. We are turning around the mess that we inherited, bringing
electricity costs back to a reasonable level, and taking cost pressure off
households, businesses and others. It is a major reform, and one that the
opposition could never have done.
I know he is interested in this. When we came into government—before
the member for Churchlands, who came in more recently—we had a crisis
in the energy sector. Costs were going up significantly, subsidies were growing
significantly and we had to increase prices quite significantly, and this
government committed to tackling those issues. A wide-ranging reform has been
underway in driving efficiencies to Western Power, Synergy and Horizon. I might
add that Western Power is a particularly important asset and it accounts for 25
per cent of our stock of debt and has accounted for most of the growth in debt.
The largest source of growth in debt has been Western Power, for a range of
reasons, such as the midwest energy project, which put transmission lines
towards Geraldton into the Karara mine but, importantly, replaced thousands of
wooden poles, which cost over $1 billion. The management and board of Western
Power are committed to driving efficiencies, both off their own bat and because
of the fact that regulations in Western Australia and around Australia are
driving down regulatory allowances and costs. Western Power has committed to
$400 million in savings each year for the next four years at least, saving $1.6
billion. Western Power accounts for about 40 per cent of the cost of
electricity to households. Reductions in costs will transfer directly to
households and to subsidies and, I might add, to contestable consumers—businesses.
It is a significant reduction. It comes on top of reductions already announced
by Synergy of $450 million over the forward estimates, and $100 million for
Horizon Power. Over the four years to date, we have cut costs in the
electricity system—generation, Horizon and Western Power—by $2 billion.
It is a substantial reduction in costs, and we expect more to come.
We are not isolated, I might add.
One of the factors that has driven this is the announcement that we are moving
from having the Economic Regulation Authority as the regulator to the
Australian Energy Regulator. That process is underway, and we expect to bring
legislation before this house soon. In response to that, Western Power
benchmarked itself against the other states and found that it was substantially
over-cost, in both operating and capital costs. It also noted that the AER was
leading to substantial reductions in regulated allowance, in both capital and
the rate of return, across Australia. For example, new determinations have led
to reductions in pole and wire costs of five per cent in South Australia and
6.5 per cent in Queensland, and 12 per cent tariff reductions in Victoria.
Western Power recognises that same tendency happening here in Western Australia,
and it will be driving down costs to both Western Power and consumers. It is
extremely important. We are turning around the mess that we inherited, bringing
electricity costs back to a reasonable level, and taking cost pressure off
households, businesses and others. It is a major reform, and one that the
opposition could never have done.
Explore WA Government Data
Search the full archive in the free dashboard, or query programmatically via API.
Explore more
Government Gazette
Appointments, regulatory notices, planning changes.
Hansard
Debates, questions, speeches and sentiment.
Tabled Papers
Reports and documents tabled in Parliament.
Committees
Committee profiles and recent reports.
Regulations
Subsidiary legislation with filters and summaries.
Bills
Proposed laws and parliamentary progress.
Acts
Current WA legislation and summaries.
Explanatory Memoranda
Bills with EMs (text/PDF) available.
Members
MP profiles, party breakdown and rankings.
Pollie Rankings
Data-driven rankings across 19 categories.
Amendment Chains
Track how schemes and regulations evolve over time.