"We want to improve our competitiveness and to grow our economy, while at the same time keeping Western Power and its successors in public ownership," Energy Minister Eric Ripper said.
The government has decided to push back the establishment of an electricity wholesale market by a year, to July 2006, to allow sufficient time for the development of the market arrangements and industry consultation.
But the division of Western Power into four separate Government corporations will go ahead as planned on July 1, next year.
Legislation to bring about the creation of four government-owned corporations and establish wholesale market arrangements, consumer protection and the electricity licensing regime, is to be drafted immediately and introduced into State Parliament in the spring session.
The reforms, expected to cost about $153 million to implement over the next four years, would be funded through Western Power's capital borrowings and dividends. This meant the reform costs would have no effect on the general government operating balance. Western Power's annual turnover is currently about $1.6 billion.
Most of the cost will be for new information technology and metering systems to operate the market.
The government said independent analysis suggests the benefits of reform would be an average 8.5% cut in electricity prices, an increase in Gross State Product of up to $300 million a year by 2010 and the creation of 2,900 new jobs.
Mr Ripper said the reforms would allow the government to focus public investment on improving electricity distribution and network infrastructure, particularly in regional areas, because private sector investment in generation would be encouraged.
"We must embrace a genuinely competitive, dynamic, robust electricity system rather than settle for an electricity market that disadvantages consumers and strangles investment and job creation," Ripper said.
The Electricity Reform Implementation Unit, is to be headed by former Queensland senior public servant and market economist Steve Edwell.
