The 'R' Files: Energy Policy in Western Australia

By Moran, Alan | Review - Institute of Public Affairs, July 1997 | Go to article overview

The 'R' Files: Energy Policy in Western Australia


Moran, Alan, Review - Institute of Public Affairs


THE WA ECONOMY

At a steady annual 6 per cent, WA's rate of economic growth rivals the Asian 'Tiger' economies.

Projected growth in WA's energy consumption, at 5 per cent a year, is over twice that of other States. Growth is being propelled by a renewed mineral development surge and increased interest in processing. But the energy growth projections in Figure 1 will be stunted-as will the associated increase in prosperity-if the price is not right.

OVERALL ENERGY POLICIES

The WA Government is opening up the energy market to competition.

Robust competition is one of the keys to ensuring lower prices: competition ensures that suppliers are constantly vigilant in seeking out cost savings in order to improve their position against rivals. But the opening of WA's market has been too slow, and so prices are higher than they could be.

WA businesses are far less free to choose their own supplier than those in other States. Under announced policy, only the largest twenty firms will be free to choose their own supplier by July 1999. By then, all but the smallest businesses and households will have been freed up in NSW and Victoria, with SA and Queensland not far behind.

In electricity, Western Power has failed to match the efficiency of power producers in the Eastern States-and those producers in turn have been far less efficient than many overseas counterparts. And though Western Power is involved in a vigorous outsourcing exercise, this brings little competition within WA's market structure. There are, moreover, no plans to have Western Power's generation plants disaggregated into competing sources. This puts considerable-and on past record, unwarranted-confidence in the abilities of a centrally-controlled authority to find low-cost ways of meeting consumer needs.

Again in the case of gas, announced plans cover the release of only the very largest users from `captive customer' status.

The enormous gas quantities available at world prices from the North-West Shelf offer WA an energy advantage over other Australian States and potential competitors overseas. But the present gas price in WA is not particularly low, being comparable with that in South Australia and Victoria. There are several reasons for this:

*the long distance that the gas is transported adds 50 per cent to the original costs by the time the gas is delivered to the Perth market; some such cost penalty is inevitable, but transport costs are considerably higher than those of comparable pipelines as a result of the high operating costs and the excessive initial costs of the Dampier to Bunbury Natural Gas (DBNG) Pipeline;

*the relatively high contract price believed to have been agreed for the gas contracted by the NorthWest Shelf Joint Venturers;

*competition is constrained because the existing pipeline is close to capacity, and there are very limited opportunities for end-users to contract directly with the suppliers;

*moreover, shippers must supply LPG-rich gas or incur a penalty.

THE NATIONAL REFORM AGENDA

The national competition reforms following the Hilmer Report have lent increased urgency and an added discipline on State governments to open up markets to competition and neutralise any commercial advantage enjoyed by State-owned businesses. Not only are such measures beneficial to the efficiency of State economies, but the Commonwealth also agreed to share the benefits it obtains in terms of higher income taxes from more efficient, more profitable businesses. These payments depend on each State's satisfying the National Competition Council that it is taking appropriate action to implement reform.

States therefore stand to make a dual gain from opening previously closed markets to competition-the increased productivity of their supply industries is augmented by special payments. WA's share of the $16 billion payments is about 10 per cent. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

The 'R' Files: Energy Policy in Western Australia
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.