IPAG: WA government electricity plans premature

The Western Australian government have prematurely announced the electricity power procurement plans for the coming decade potentially costing taxpayers, Independent Power Advisory Group said today.

IPAG's members include Alcoa Australia, AlintaGas, Duke Energy International, Griffin Energy, Landfill Gas & Power, Newmont Power, Perth Energy, Stanwell Corporation and TransAlta Energy.

WA Energy Minister Eric Ripper announced last Sunday he had approved Western Power's plan to increase electricity generation by an additional 540MW by 2007 to meet future demand.

"Rushing into the power procurement process that is controlled by Western Power is not in the interest of WA electricity consumers," IPAG chairman Ky Cao said.

"We should not underestimate the cost to the State of having generating plants, paid for by WA taxpayers one way or another, sitting idle for years, while this cost is forcefully recovered from a customer base that is held captive by a monopoly utility."

Cao said the power procurement decision should be delayed until final recommendations of the Electricity Reform Task Force were released in September. IPAG participated in the taskforce.

"A four month delay is not going to affect the State's power supplies," Cao said.

Cao said Western Power traditionally to over forecast electricity demand.

"We don't agree with Western Power that we will need additional peaking capacity in 2005 or base load capacity in 2006-07,Cao said.

"We can easily delay new capacity for a couple of years to ensure we get the market structure right."