Western Australians are starting to enjoy the benefits of competition as natural gas providers start a price war, but Treasurer Ben Wyatt will not give a timeline for when it will happen for household electricity.
Origin Energy is offering WA households 35 per cent off its gas bills, representing more than $200 a year on average, as it enters the market.
Licences to sell gas in WA were granted to Origin and AGL this year and the only other competitors are Wesfarmers-owned Kleenheat and formerly state-owned Alinta Energy.
WA has abundant gas supplies for the domestic market due partly to its gas reservation policy, which the eastern states do not have.
State-owned Synergy is the only electricity retailer.
Mr Wyatt said he believed people wanted competition as occurred in most of the nation, but it was a "vexed question" and did not lead to lower prices in Victoria when they were the first to privatise energy assets in the 1990s.
"It hasn't translated into the poor old consumer over there in Victoria," he told reporters.
"How do you transfer the benefit of reduction from wholesale through to retail ... so that consumers benefit from that competition, not just the wholesalers?"
Other hurdles were the fact that WA does not yet have "smart meters" for flexible pricing, in which consumers can use electricity outside of peak times, helping control the costs of having to invest in the poles and wires.
State-subsidised Synergy also needed to be restructured so it could compete with the big players such as Origin and AGL, which people have been warned will initially mean electricity price hikes of up to 15 per cent over the next two years.
"How do we also do it without simply seeing value transferred from Synergy to private operators almost overnight?" Mr Wyatt said.
One option includes gradually opening competition up to smaller businesses and large residential customers, since big businesses using more than 50 megawatt hours of electricity a year to have choice in WA.
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