Around 49 percent of the electricity businesses in New South Wales are stet to be sold off in New South Wales following government approval of a plan to privatise part of the state’s network and bring down surging power costs, but the transaction would be subject to voter approval at the next election.
'Around 49 percent of the electricity businesses in New South Wales are set to be sold off following government approval of a plan to privatise part of the state's network and bring down surging power costs, but the transatction will be subject to voter approval at the next election.
The remaining 51 percent of the network would be held in a government operated Future Fund, whilst funds from the sale of the 49 percent stake would go toward new infrastructure investment.
But the proposed sale – which would not be completed until at least 2016, will be subject to the government winning the 2015 election and gaining a ‘mandate’ Baird said, and would be subject to a number of conditions including maximum prices which were one percent lower than forecast regulated prices until 2019, no adverse effect upon regional coverage or electricity reliability and job protections which are ‘consistent with previous transactions’.
Hitting out at what he refers to as a ‘scare campaign’, Baird says fears about prices, services and jobs under a privatised model were unfounded, and adds that prices will remain subject to regulation by the Australian Energy Regulator, standards regarding safety and reliability are enshrined in legislation and would continue to be enforced through licenses and that job protections would be put in place notwithstanding the fact that skilled personnel would still be required to maintain and operate the network regardless who owns it.
Baird says analysis from Ernst & Young commissioned by the NSW Treasury found that since privatisation in the 1990s, power prices had fallen in real terms in South Australia and Victoria where privatisation had occurred but had more than doubled in real terms in New South Wales and Queensland where assets had remained in public hands.
“I am confident that following this transaction electricity prices will be lower for customers over time than would be the case if government retained 100 per cent ownership,” he said.
“Employees and regional communities can be confident about their future.”
But Greens NSW MP John Kaye says the aforementioned claims on prices were misleading as New South Wales power bill increases had been driven by an ‘ill advised’ change to reliability standards in 2005 and a subsequent investment of $18 billion in new wires and poles.
"By selectively using data, consultants can produce any headline their clients want to hear” Kaye said.
"In this case, the cyclical differences between Victoria and NSW were conveniently ignored.”