The Liberal-led Western Australian government has contradicted itself, revealing it doesn't have a clear policy for state-owned energy assets, the opposition says.
Energy Minister Mike Nahan told reporters on the weekend power generator Verve and retailer Synergy - which are to be merged on January 1 - would be split within five years into businesses performing both roles, then partly privatised.
The move was designed to increase competition, Mr Nahan said.
But in parliament on Wednesday, Premier Colin Barnett ruled that out.
"There is no plan to merge and then de-merge and privatise utilities," Mr Barnett said.
"I do not know what the minister's comment were to the media concerned ... but I would imagine he was perhaps looking into the very long-term future of what the energy structure might be in Western Australia.
"But this government is not privatising, other than maybe individual assets, and the one thing we are doing is bringing Verve and Synergy together to get a bit of accountability and a bit of performance, and savings for taxpayers."
Opposition energy spokesman Bill Johnston said the government's energy policy was in a shambles and it was impossible to know what it was aiming for.
Mr Nahan had previously alluded to Synergy and Verve existing as separate gen-tailers in the long-term future at an Energy in Western Australia conference held on August 21.
"The merger is a transitional but necessary phase to further disaggregation down the track," he said at the time.
"There isn't any incentive or capacity in the government and private and the community for a large scale privatisation at this time. So what we have to do is in fact set up a system that prepares for down the track disaggregation."
