WA power prices to rise 5%, says premier

Electricity prices in Western Australia will jump another five per cent next year, and power producer Verve and retailer Synergy will be merged, according to Premier Colin Barnett.

Mr Barnett told Fairfax radio 6PR on Wednesday morning the 2006 decision to split Western Power into four state enterprises had led to unnecessary competition and higher prices.

The utility was split by the previous Labor government, with Western Power now managing the southwest electricity grid, including the Perth metropolitan area; Verve managing power production; Synergy managing billing; and Horizon Power managing WA's northern energy grid, power production and billing.

Mr Barnett said there was "no doubt" the troubled Western Power - which has come under fire for its ailing electricity pole network that led to last week's resignation of managing director Doug Aberle - should remain separate.

But he said the decision to split power producer Verve and biller Synergy into two separate companies was confusing.

"They are basically competing and interfering with each other, and damaging each other, and there is no point to that," Mr Barnett said.

"We have had some work done internally on how we might progressively bring them together.

"We haven't made that decision yet, but my view has always been that Verve and Synergy should never have been separated."

Mr Barnett said the division had not only forced his government to raise electricity prices - which would jump another five per cent next financial year, on top of a 36 per cent rise since 2009 - but was creating inefficiencies and extra pollution.

"We've got a situation where Synergy goes out and contracts for renewable energy as a government agency, but then you've got Verve, another government agency, with expensive power plants sitting there idle," he said.

"We've even ended up seeing a coal plant being used ahead of a gas plant, when the gas plant is cheaper."

Mr Barnett said he would force Synergy to keep jobs in WA, after the retailer earlier suggested it might outsource IT jobs to India.

The premier also to defended his beleaguered energy minister, Peter Collier, saying he had a "difficult portfolio".

"The energy sector has been very difficult, because I think it's very confused following the break-up," Mr Barnett said.

"I think Peter's done a good job in a very tough environment."

Mr Barnett also defended the decision to wind back WA's solar energy feed-in tariff scheme last year, saying it was "poorly proposed".

"The take-up rate was just excessive and the scheme was too generous," he said.

"Certainly more went into that scheme than was ever intended."