SECWA will inform its commercial customers about changes to its security deposits system through a flyer enclosed with energy accounts.
Acting Energy Minister Joe Berinson said today that the new security deposit options would benefit many Western Australian businesses.
"Talks between SECWA and the Small Business Development Corporation led to the changes, which will be effective from March 1," Mr Berinson said.
The changes were announced in the Premier's Economic Development Statement last Wednesday.
"They will free up working capital for businesses and assist economic recovery from the current recession," Mr Berinson said.
Under the new arrangements there are various ways for businesses to minimise their SECWA security deposit.
New businesses that establish a good payment record over a 24-month qualifying period will be able to ask SECWA to review their security deposit. This could result in a refund of any amount which exceeds their average energy account.
Where it is practical in conjunction with SECWA's meter reading rounds, new businesses will also now have the option of one month billing periods, as opposed to the present two month system. This will cut the security deposit requirement by 50 per cent.
Established firms with a 12-month good payment record will be able to gain a refund of money they have deposited which exceeds the average energy account.
Reviews of security deposits when businesses are relocated to new premises will now be waived if there is a good payment record.
Under the present system, deposits are reviewed whenever a business moves to a new address and this has often resulted in a substantial increase.
"Security deposits are required to minimise SECWA's exposure to the risk of bad debt from commercial customers who account for 75 per cent of the utility's revenue," Mr Berinson said.
"In the event of businesses defaulting on their energy bills, these losses would have to be shared by all of SECWA's customers.
"At the same time, SECWA recognises the good payment record of many businesses and does not review their security deposits. This is evidenced by the fact that SECWA currently only holds security against 50 per cent of its standard non-domestic tariff sales."
Mr Berinson said SECWA was considering a further option to reduce security deposits through shorter billing periods, but this could not be introduced until its invoicing system was replaced in 1994.
SECWA's 'Energy Card' was another recent initiative which enabled businesses to make regular payments towards their next energy account.
