On Monday, Premier Morris Iemma announced the Government would sell NSW’s state-owned electricity retail companies and lease the State’s power generation companies to private operators. This decision was voted for by cabinet and caucus and followed the recommendations of Professor Owen following his inquiry into the electricity supply in NSW.
The “bricks and mortar” assets of NSW’s state owned companies Energy Australia, Integral Energy and Country Energy will remain in Government ownership, while their retail functions will move to private operators.
The Government is expected to earn approximately $15 billion in proceeds over the next ten to fifteen years from the sale. This money will be held in a new “NSW Intergenerational Fund” to be managed by NSW Treasury.
Where the money will be spent
The Government has committed the proceeds of the sale to “priority areas” including:
- A European style Metro-Rail for Sydney;
- Extension of the M4 road at Strathfield to the western end of the Anzac Bridge;
- Improving rural and regional transport;
- Improving rural and regional water management;
- Development of cost-effective energy efficiency measures; and
- Supporting clean energy including clean coal and renewable technologies.
The NSW Government will extend energy price regulation for a further three years to ensure household consumers and small businesses are protected from volatility in power prices as a result of electricity market deregulation.
IPART will continue to set electricity prices for household consumers and small businesses until 2013 – or until the Government is satisfied with the level of competition in the retail energy market.
The Department of Water and Energy will also set up an electricity and gas price comparison service for households and small businesses.
Ensuring jobs for current state energy workers
The Government has guaranteed the jobs of public sector retail and generation electricity workers and has promised incentive payments to all union employees who agree to have their jobs moved to the private sector.
NSW Government’s electricity retail businesses currently employ approximately 1,400 award workers, and the Government’s three generation corporations currently employ approximately 1,700 award workers.
The Government also intimated that private investors will be sought to build NSW’s next baseload electricity station, which needs to be built by 2014.
For more information, see http://www.dpc.nsw.gov.au/