There are calls for the West Australian government to throw open the energy market to competition, with the state's biggest private power company claiming it could help businesses struggling with the economic effect of COVID-19.
A report by big four consultancy firm KPMG – commissioned by Alinta Energy – suggested liberalising WA's protected electricity market for small and medium-sized businesses could cut their power bills up to 15 per cent.
Jeff Dimery, the chief executive of Alinta, claimed the savings equated to anything from $500 for smaller businesses to almost $2,000 for bigger enterprises currently paying about $15,000 a year for their power.
Under WA's electricity regulations, state-owned utility Synergy has a monopoly over any customer using less than 50 megawatts hours a year – including small and medium-sized businesses.
According to the KPMG report, lowering the so-called contestability threshold to 20MWh would help grow the state's economy by more than half a billion over 15 years.
Businessman Christian Salerno, who owns and runs Swish Coffee Brewers in Perth's CBD, said he would jump at the chance to shop around for a power provider.
Mr Salerno said trade had been smashed during the pandemic by up to 70 per cent as consumers stayed away from the office or kept their distance from others.
He said lower power bills were unlikely to be a panacea for his business, but "every little bit helps".
"It all adds up," Mr Salerno said.
"Thousands of dollars here and there … it makes a big difference towards the bottom line."
Power monopoly 'not fair'
As a business owner in hospitality – one of the most competitive industries in the world – Mr Salerno said it was ironic he was unable to choose where he bought his power.
He said competition enforced discipline on a business, benefiting consumers in the form of lower prices or better service.
The 36-year-old said he saw no reason why the electricity market should be any different.
"If we were the only coffee shop in town, business would be great," he said.
"We would be obligated to do what is fair on our part, but at the end of the day the choice would be ours.
"If we decide to bump up prices or we want to control the value output … that would be completely up to us.
"And that's not fair."
Mr Dimery said the WA government had provided commendable support to small businesses during the pandemic but argued many were hurting, especially those in hospitality affected by social distancing measures.
"It could essentially be the difference survival and extinction for some of these businesses," he said.
According to Mr Dimery, there were more than 20,000 business customers affected by the state's restricted market.
But he noted those same businesses were free to choose where they bought their gas – a market where Alinta's monopoly share has ebbed away since competition was introduced several years ago.
Energy reform 'challenging'
State Energy Minister Bill Johnston said the gas market was not comparable to the power market given electricity was far more widely used and made up a much bigger cost for most users.
Mr Johnston said he sympathised with Alinta's broader arguments but noted many business users would miss out on the benefits of competition under the firm's proposal.
That was because many businesses operated inside so-called embedded networks such as malls and shopping centres where they were forced to buy their power from the complex owners.
The Minister said such customers often paid rates far in excess of those charged by Synergy and they would be excluded from competition unless legislative changes were made.
"The government is looking at lowering the small business contestability threshold," Mr Johnston said.
"But there are a range of challenges in doing that.
"If we're going to move away from a government monopoly for small business, we shouldn't just replace that with a private monopoly."
Mr Johnston said the government would look to consult with the public before pressing ahead with any legislation.
However, he cautioned that overhauling laws was "not a fast process" and any changes were not likely in the short-term.
