PERTH (miningweekly.com) – The Australian Petroleum Production & Exploration Association (Appea) has welcomed the decision to transfer Western Australia's gas market functions to the Australian Energy Market Operator (AEMO).

The Western Australian government would transfer the South-West region’s system management and operations of the wholesale electricity market to the AEMO.

AEMO would be responsible for the administration of the Gas Bulletin Board and Gas Statement of Opportunities and would also assume the function of the retail market operator when the state government introduced competition in electricity services for small businesses and households within the next few years.

To date, these functions have been undertaken by Western Power and the Independent Market Operator (IMO).

Appea CEO for the Western Region Stedman Ellis said the oil and gas industry had long supported a consistent national approach to the presentation of gas market information.

“At a time when governments and industry are focussed on less duplication and red tape, it is pleasing to see the Western Australian government recognise the benefits of an integrated national approach to administration of the Gas Statement of Opportunities and Gas Bulletin Board,” he commented.

“[The] announcement delivers a more streamlined means of providing market transparency and should lower costs for industry and consumers by utilising AEMO’s existing information technology and operating systems.

“This means greater consistency of market systems and processes between Western Australia and other jurisdictions,” Ellis said.

“It no longer makes sense to have these functions spread across separate entities. An integrated approach will bring financial and operational efficiencies to our energy sector over the coming years,” said Energy Minister Mike Nahan.

The Minister said the transfer was part of the Liberal National government's efforts to drive efficiencies in the energy sector and limit future electricity price increases for households and businesses and marked an important milestone in the government's electricity reform programme.

“The appointment of a single system and market operator will establish a strong foundation for the delivery of the remainder of the government's electricity reform programme and the development of a more efficient energy sector in the state,” Nahan said.

Western Australia would maintain its own wholesale electricity market arrangements, rather than adopting the arrangements of the National Electricity Market, which operates in the eastern states.

The IMO would temporarily maintain the function of administering and determining changes to the regulatory framework governing the operation of the state's wholesale electricity market. This function will be transferred to a Western Australian government entity, which is yet to be determined.

Nahan said he was pleased with AEMO's commitment to having a physical presence in Western Australia and maintaining both a corporate office and an electricity system control room in the state.