Oversight of the Electricity Industry Restructuring
In June 2008, NSW Parliament asked the NSW Auditor-General, Peter Achterstraat, to conduct a review of the Government’s proposed Electricity Industry Restructuring.
The NSW Government is proposing to sell the retail functions of Energy Australia and Country Energy, establish a leasing arrangement for the generators Macquarie Generation and Delta Electricity, and provide an initial public offering of Eraring Energy and the retail function of Integral Energy.
The Auditor-General’s terms of reference included:
- the way in which the Government wishes to proceed with the restructuring of the State’s electricity industry;
- to examine the proposed employee protections on offer.
On Wednesday, 21 August 2008, Mr Acheterstraat tabled his review report to the NSW Legislative Assembly. The report found no major issues with the Government’s sale and lease.
However, the Auditor-General identified the following areas as requiring further consideration by the government:
- the Government setting a reserve price prior to the transactions for each retailer and generator and not proceeding unless the reserve price is met;
- individual retailers and generators could be transacted at the same time rather than sequentially as is currently proposed;
- development sites attached to generators could be tendered separately from the generators in order to encourage quicker development of such sites;
- Treasury continuously evaluating the process and the likelihood of success after the marketing campaign and specifically before the first transaction occurs.
The report also scrutinised the issue of protections proposed for New South Wales electricity customers and found them to be broadly consistent with those of other states.