COMMENT: Well, it’s finally happened. The NSW Labor Government has sold off the retail and generation arm of its electricity generation assets to foreign/private ownership.
The only people that should be cheering this deal is the dead-duck state Labor government and the private entities OriginEnergy, which bought retailers CountryEnergy and IntegralEnergy and the output from the Eraring power station on the NSW mid-north-coast; and Hong Kong-based TRUenergy, which picked retailer EnergyAustralia, the output from Delta West, Mt. Piper and the development sites at Marulan in the Southern Highlands.
As the Sydney Morning Herald rightly points out this morning,
The deal means that TRUenergy and Origin will emerge with a combined 85 per cent of the state’s power market, little different from the oligopoly that exists in other industries such as supermarkets and banking.
No-one in their right mind could say that we have competition in either of those industries and now we have the same thing in power generation.
How this could mean anything other than higher electricity prices is beyond me.
Frankly, that any government could think to sell off state assets is mind-boggling enough yet NSW State Treasurer Eric Roozendaal is claiming the $5.3billion deal is a win for taxpayers. Whatever else it is, it’s the final payment NSW taxpayers will receive for these assets. Once you sell an asset, that’s the end of any return you get for it.
And with control now in the hands of private boards rather than publicly-elected officials, shareholders rather than taxpayers will now have ultimate say over electricity prices.
And shareholders never vote for cheaper prices.
So if you thought electricity prices had skyrocketed in the last couple of years, I suggest as a result of this midnight deal struck by NSW Labor, we haven’t seen nothin’ yet.