Independent watchdog against the #utilities merger plan

The Economic Regulation Authority has warned against merging two of the state’s power utilities, ABC reported.

The State Government has flagged the possibility of merging the electricity producer, Verve, with the retailer, Synergy.

They were established in 2006 following the break-up of Western Power.

The ERA has released a report saying a merger could put more pressure on power prices by reducing competition and discouraging private investment.

It has warned there is increasing concern amongst the sector about the possibility and has recommended against the move.

The ERA’s chairman Lyndon Rowe says talk of a merger is creating uncertainty in the energy market.

"What they want is certainty, they want policy certainty, the amount of uncertainty around at the moment is not helping with that," he said.

"You’re not going to get people to put serious money into looking at options for investing in this market if there’s policy uncertainty around, that uncertainty needs to be dealt with."

The ERA has also rejected the argument that splitting up Western Power in the first place has contributed to recent price hikes, saying increases were inevitable because they had remained stagnant for so long.

The Energy Minister Peter Collier says the Government will consider the ERA’s advice.

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