With the uproar from last summer’s blackouts still fresh in his mind, energy minister Eric Ripper has put $210 million of taxpayers’ money on the line to secure a stable energy supply. Whether the Gallop Government is still in power to reap the benefits is something yet to be determined.
As noted in EnergyReview.Net yesterday Ripper will ease the $100 million in stamp duty weight around the neck of the Dampier to Bunbury Natural Gas Pipeline (DBNGP) by redirecting a similar amount to expanding the pipeline’s capacity under the new owner.
Not surprisingly the stamp duty ‘reimbursement’ has come under attack from entities ranging from the Real Estate Institute of WA to the WA Chamber of Commerce and Industry.
Both associations said the move sets a dangerous precedent and was unfair to the members of the public currently being swamped by exorbitant stamp duty fees on housing.
"Most property buyers would sympathise with the problems faced by a buyer of the pipeline in meeting the huge stamp duty costs. The State Government is also trying to protect power supplies but the stamp duty barrier is a problem caused by this government and its predecessors,” said REIWA president Jim Henneberry.
"However the Government is considering a stamp duty bail-out for a single transaction involving the pipeline sale, which is almost equal in value to the entire stamp duty reforms in the recent state Budget.
Adding to the expenditure bill Ripper today revealed plans for a new 120MW gas-fired power station, worth an additional $100 million to serve as a new peaking plant from the 2006-2007 summer.
This makes a total of $210 million pledged in two days to address a power crisis that was predicted before the government came to power over three years ago.
Ripper announced the peaking station as an alternative to 240MW Cockburn 2 power station which has been rejected totally. The move was made to ensure that private entities are not deterred from entering a local market dominated by government utilities.
"After careful consideration, the government has decided that a peaking power station is needed rather than another baseload plant, so the proposed combined cycle plant at Kwinana (known as Cockburn 2) has been deferred," he said.
"Further, the government will impose conditions on Western Power's ability to invest in new plant to leave room in the market for more private power stations to be built to meet the State's future energy needs.”
The Griffin Group immediately welcomed the minister’s announcement with executive general manager of Power Generation Wayne Trumble saying the decision was a vote of confidence in the private sector's ability to supply sustainable and secure energy to Western Australia.
Trumble said Ripper's decision vindicated the government's faith in such private proposals as Griffin's Bluewaters power project as well as the Power Procurement Process (PPP) to which his company is committed.
Apart from Griffin's short listed submission to build a 330MW coal fired power station at Collie under the PPP, Griffin has already commenced development of the first 200MW phase of its coal fired Bluewaters Power Station to be built on Griffin owned land in Collie.
“We see today's announcement as a strong vote of confidence in the coal industry as the logical supplier of base load energy in WA, although we are concerned that the Government has only deferred Cockburn 2 and not scuttled it.”
