Electricity prices could rise further as a result of a Treasury decision to lift the cost of power utilities having access to billions of dollars of State Government-backed debt.
An initiative outlined in last month's Budget revealed Government enterprises would have to pay 250 per cent more for a guarantee on all borrowings through the WA Treasury Corporation.
The move, which will boost Government revenue by $329 million over four years, was reportedly designed to create a "level playing field" for the groups and expose them to market-like pressures.
However, electricity distributor Western Power revealed during a parliamentary estimates session last week the change would cost it an extra $30 million a year.
Western Power, whose assets are valued at more than $6.5 billion, will need to borrow billions of dollars more in the next five years as part of plans to maintain and expand its vast network of poles and wires.
The revelations in Parliament mean electricity consumers or taxpayers will foot the bill because the impost will either be passed on as higher electricity prices or a reduced dividend from Western Power to the Government.
Shadow electricity minister Bill Johnston said the decision appeared to be a tax grab by a Government that was increasingly using the electricity utilities as a cash cow.
Mr Johnston said there was no justification for raising the loan guarantee fee from 0.2 per cent to 0.7 per cent because Western Power was a monopoly provider.
"One way or another it reduces the amount of capital available to build the network," he said.
"So in the long term it has to be paid by electricity consumers because it increases costs."
Treasurer Christian Porter said current arrangements unfairly disadvantaged private companies wanting to raise capital in WA and the changes would ensure there was "competitive neutrality".Energy Minister Peter Collier said the changes would have no bearing on the next round of electricity price increases to come into effect from next month.
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