Re­port backs Hori­zon net­work sale

Pilbara News - - News - Daniel Mercer

Sell­ing the poles and wires owned by Hori­zon Power in the Pil­bara is cru­cial to re­form­ing the re­source-rich re­gion’s elec­tric­ity sec­tor, a long-awaited re­port says.

Al­most two years af­ter it was con­vened, a high-level com­mit­tee headed by Syn­ergy chair­man Lyn­don Rowe has re­leased a re­port rec­om­mend­ing a whole­sale shake-up of the Pil­bara’s “in­ef­fi­cient” power sys­tem.

The re­port’s cen­tral rec­om­men­da­tion is the po­ten­tial $600 mil­lion pri­vati­sa­tion of the grid, which runs from Kar­ratha to Port Hed­land, and es­tab­lish­ment of an “in­de­pen­dent” op­er­a­tor.

Most of the grid is owned by Government-con­trolled Hori­zon.

The re­port said the ar­range­ment “cre­ated an in­cen­tive for re­strict­ing ac­cess to its (Hori­zon’s) dis­tri­bu­tion net­work in or­der to limit the po­ten­tial for re­tail com­pe­ti­tion”.

A pri­vate op­er­a­tor, it said, would have a stronger com­mer­cial in­cen­tive to sell the ben­e­fits of the grid and bet­ter ac­cess to cap­i­tal.

The re­port also called for a regime that ini­tially en­sured Hori­zon and pri­vate com­peti­tor Alinta En­ergy could use each other’s net­works.

While the net­work was “no­tion­ally” open to com­pe­ti­tion, the re­port said in re­al­ity there were two ma­jor bar­ri­ers to pri­vate providers tak­ing on Hori­zon. One was Hori­zon’s un­will­ing­ness to al­low com­peti­tors to use its net­work.

The other was the State’s uni­form tar­iff pol­icy, which meant tar­iffs were gen­er­ally be­low the cost of sup­ply.

A third rec­om­men­da­tion was the es­tab­lish­ment of an in­de­pen­dent sys­tem op­er­a­tor, with the com­mit­tee say­ing Hori­zon car­ried out the role at “sub-op­ti­mal” lev­els.

En­ergy Min­is­ter Mike Na­han said while the Government was look­ing into the sale of Hori­zon’s net­work as­sets, no de­ci­sions had been made.

Shadow en­ergy min­is­ter Bill John­ston said La­bor op­posed sell­ing Hori­zon’s net­work.

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