The DSM system sees large users of electricity paid to switch off during times of peak demand – freeing up electricity capacity for other users and removing the need to generate extra power.
DSM pays companies $66 million to potentially reduce or shut down their electricity consumption if called upon to ensure peak demand can be met, or take pressure off the network in the event of an incident, according to Dr Nahan.
However, DSM has been used only eight times since 2005-06, including for testing.
Lobby group Western Australians for Lower Power Prices have distributed flyers in the Southern River electorate with local member Peter Abetz and Dr Nahan’s faces on it with “These men are planning to push power costs up by $107 million each year” written on it.
The group said if the DSM was to be removed, it would add more than $100 million to the WA electricity market.
“Removing the DSM smart back-up power system from the capacity energy market would reduce competition and increase costs,” a representative from Western Australians for Lower Power Prices said.
“The smart back-up power system is a far cheaper option than running existing gas, coal or diesel fired power stations or building new ones. Competition in a market is vital to keep prices at their lowest possible point. That is how all markets work. It is basic economics.”
Dr Nahan said the reason why they are launching a review was because it had not been used that often.
“I will ensure that the correct incentives are in place to drive an effective and efficient contribution of DSM in the WA electricity market – without increasing power prices, impacting electricity supplies, or causing higher emissions from power stations,” he said.
“I fail to see how anyone could argue that WA mums and dads should continue to fund this going forward.”
Mr Abetz attacked the campaign, calling it an insult to the intelligence of the community.
“We have a group of businesses mounting a campaign to persuade the public that Western Power should continue to pay them $60 million a year for absolutely nothing,” he said.
“However they have not been called upon for years – even during the recent heatwave of three days over 40C, none of them were asked to reduce their consumption – so in reality electricity consumers are needlessly paying these businesses $60m annually.”