Fuel and Energy Minister Geoff Gallop said today that the Government stood by its decision to pursue a privately owned, built and operated coal-fired power station at Collie.
Dr Gallop was responding to criticism of the decision by Dr Frank Harman in an Institute of Public Affairs paper released yesterday.
"The Collie project is part of an overall SECWA strategy to reduce electricity tariffs by at least 25 per cent in real terms by the end of this decade," Dr Gallop said.
"For the first time in recent history, Western Australia is pegging back electricity price differentials with the Eastern States.
"Last year's two per cent tariff increase was the lowest of all Australian States and there will be no increase this year. Meanwhile, SECWA's new time of use tariffs are delivering actual reductions in power costs to commercial and industrial customers throughout the State.
"These achievements have substantially resulted from negotiations with coal producers and unions in Collie and the coal price reductions and work practice improvements that have been secured.
"It needs to be realised that the benefits that are flowing through to the State from these negotiations go far beyond the considerations of Dr Harman's paper. Collie's response has stimulated competition between alternative fuels in WA and this is essential for the State's future development."
Dr Gallop said it was also important to note that Dr Harman's comparisons of gas versus coal were based on a 20-year projection.
However, the fact was that the coal-fired power station contract was over a 30 year term. As the capital costs of the power station were met, the price of coal-delivered electricity markedly decreased.
"The Government is determined to achieve the cheapest possible electricity prices for the State," Dr Gallop said.
"SECWA's advice is that coal will deliver this result ahead of gas in the long term.
"SECWA and Asea Brown Boveri are currently working together to finalise an agreement that will secure the Collie project.
"Dr Harman has not been involved in these negotiations and the positions on which his report is based are two years old."
