The Chamber of Minerals and Energy said new investments in the wholesale electricity generation market will be put at risk if Premier Colin Barnett pursues a re-amalgamation of Synergy and Verve Energy.
CME chief executive Reg Howard-Smith said today the state government should consider carefully how a re-merger would affect new players entering the wholesale energy market.
"The Chamber supports a structure that places downward pressure on electricity prices." Mr Howard-Smith said.
"We have seen increasing competition in the wholesale generation market - with a number of new players looking to enter the sector."
With uncertainty created by the possibility of a re-merger, Mr Howard-Smith added that new investments would be put at risk.
"The goalposts will shift for new players in the energy industry and undermine confidence in the market."
Mr Howard-Smith suggested that independent advice be sought to look at how the market is working and to address any issues that have arisen from the break-up of the former Western Power.
"A great deal of resources have been invested getting to this point - in taking advice from an independent source, measures can be put in place to address issues within the market without compromising competition." Mr Howard-Smith said.
Yesterday, Mr Barnett flagged legislation to re-unite Synergy and Verve Energy.
He said the break-up of Western Power had proven to be a financial nightmare, costing the state hundreds of millions of dollars.
