WA back-up power program too costly: Nahan

A West Australian lobby group has vowed to campaign until the state election about retaining a back-up power program that costs taxpayers millions of dollars but hasn't been used in Perth since 2011.

Western Australians for Lower Power Prices (WALPP) fear the state government will axe the Demand Side Management program, which pays more than 300 companies for agreeing to reduce or switch off their energy use if required.

That may be during times of peak demand or to take pressure off the network in the event of an incident.

But the group admits the companies haven't been required to do anything for several years, while the system costs the state government $65 million a year.

They argue, however, that cutting the program will increase the annual cost of insuring the WA electricity market against blackouts by an estimated $107 million.

Energy Minister Mike Nahan says the companies have been paid about $429 million since the program was introduced in 2005-06 "yet the service has only been called on for eight occasions, which included testing".

"The reality is that those DSM providers have not been called on to do that in the metropolitan area since 2011, despite receiving millions of taxpayer dollars each year," Dr Nahan told AAP in an emailed statement.

"That was a cost borne by WA electricity consumers that was completely unnecessary.

"I fail to see how anyone could argue that WA mums and dads should continue to fund this going forward."

Dr Nahan said he didn't plan to eliminate the DSM altogether, but wanted to ensure consumers were getting the best value.

"The reality of the situation is that consumers would not notice if DSM was removed from the market," he said.

"This campaign is nothing more than scaremongering by vested interest groups."

WALPP has called for the program to be reformed rather than axed.