But the Government first had to rely on the Liberal Party to renege on an amendment moved by the Nationals, which would have forced Western Power to spend 50% of its capital and maintenance budget in the country.

The WA Nationals said they were very disappointed and country residents had been given a raw deal.

But Liberal Party deputy leader Dan Sullivan said country power supplies would be safeguarded under the break-up.

"We were able to negotiate a different amendment which guarantees a standard of service, a better, improved standard of service for country electricity users throughout WA," he said.

Western Power will be split into four utilities by the end of March 2006.

As approval of legislation to divide Western Power into four separate businesses approaches, managing director Tony Iannello insisted that operational performance would not be compromised.

“We are transforming ourselves from an integrated business into four customer-focused, commercially responsible and performance-driven businesses and will continue to improve upon delivering safe, reliable and efficient energy services,” he said.

Earlier this week, Iannello announced the utility’s annual results for the 2004-05 financial year.

Western Power recorded a growth in total revenue of 5.7% over the previous year, mainly due to increased revenue from the sale of electricity, a result achieved without increasing electricity tariffs.

Iannello said electricity prices had fallen by an average of nearly 20% in real terms over the past decade, with further assurances from the State Government that there would be no increase in tariff charges for the next few years.

Despite the boost in revenue, Western Power’s profit fell. It posted an after tax profit of A$206.1 million – A$35.4 million lower than last year – with payments to the Government totalling A$215.6 million for the year.

Iannello said the profit had exceeded expectations, and it was lower mainly because of significant spending on the electricity network to improve reliability and measures taken to increase generation capacity.

“We can expect Western Power’s net profit to continue to fall in 2005-06 as the impact of competition becomes more significant, with new generating companies entering the energy market and retail competition intensifying,” Iannello said.

“Our priority this year was to ‘keep the lights on’ during summer in a year where demand hit record levels, both in summer and winter.”

Iannello said Western Power’s success in meeting peak demand was largely due to generation initiatives that included having greater flexibility in the mix of fuels, enhancing equipment and putting in place extra fuel arrangements.

“Restoring oil-firing at Kwinana power station and steps taken to boost capacity such as installing cooling sprays at Pinjarra power station, meant we were in a better position to maximise supply when required,” he said.

“These measures resulted in Western Power being able to deliver up to an additional 200MW of peaking capacity.”

Steps taken to improve reliability over the summer included: transformer replacements and upgrade programs; pole-top fire mitigation initiatives; a $10 million upgrade to Western Power’s fault system; bushfire mitigation activities; and a demand management program.

In addition, the Government has committed A$2.3 billion over the next four years for capital works and maintenance.

While Iannello said he was confident Western Power had the generational capacity to meet peak summer demand, he was concerned that industrial action could cause blackouts.

The Communications, Electrical & Plumbing Union (CEPU) has said that despite the corporation’s healthy revenue and profits, Western Power’s staff were the worst paid electricity workers in Australia.

The current enterprise bargaining agreement expires on October 5 and the CEPU has refused to rule out industrial action.