SECWA's commercial customers will be made aware of changes to the security deposits system through information enclosed with energy accounts and media advertising.
Fuel and Energy Minister, Dr Geoff Gallop said today that the new security deposit options would benefit many Western Australian businesses. The initiative was signalled in the Premier's `WA Advantage' economic statement.
"Talks between SECWA and the Small Business Development Corporation led to the changes, which came into effect from March 1, 1992," Dr Gallop said.
"It will give eligible businesses the option of using security deposit funds for working capital or other purposes."
There are various ways for businesses to minimise their SECWA security deposit under the new arrangements.
New businesses that establish a good payment record over a 24-month qualifying period can 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 now also 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, can 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 are now to be waived if there is a good payment record. Under the old system deposits were reviewed whenever a business moved to a new address, and this often resulted in an 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," Dr Gallop 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 holds security against less than half of its standard non-domestic tariff sales."
Dr Gallop said SECWA was considering a further option to reduce security deposits through shorter billing periods, when a new invoicing system was in place.
