On the weekend, the State Government announced it would build three new power stations to meet WA's growing energy demands and replace ageing facilities in Collie and Kwinana.

Deputy Premier and Energy Minister, Eric Ripper, said Western Power needed an extra 240 megawatts of peak load capacity by 2005 and a 300 MW base load power station by 2007 to meet future demands. The peak-load plant would be powered by gas or liquids and cost about $150 million.

Western Power said it will also investigate options with the private sector for the construction and financing of the third power station, a 240 MW gas-powered plant to replace the ageing and inefficient Kwinana A plant, estimated to cost about $250 million.

However it was the Government's tender process, which was deliberately designed to give Collie coal companies an even chance to compete with gas-based proposals to supply the proposed $450 million base-load power station that has sparked controversy.

Green groups said plans for another coal-fired power station makes a mockery of Premier Geoff Gallop's claims of "environmentally sustainable development". According to Green groups, coal-fired power stations are notorious producers of greenhouse gases.

Industry workers around Collie however are hoping for a coal-fired station as many believe a win for gas would see a contraction of the coal industry and subsequent job losses.

WA Premier Dr Geoff Gallop said a new coal-fired power station would use up-to-date technology with better emission controls than the existing plant in Collie.

Nevertheless, the Premier said the ball was in Collie's court. "We've made it clear that Collie has a real chance here in terms of future base-load generation and if they get the coal price right, if they get the electricity price right, they will have every opportunity to win that contract," the Premier said.