Wednesday, September 12, 2007

NSW Electricity Sale to Benefit Budget - Not People

On 4 May 2007, the NSW Premier, Morris Iemma, told Parliament
"there will be no sale of electricity generation, transmission or distribution"
On 11 September the Owen Inquiry into Electricity Supply in NSW was released. Its recommendation is a s follows:

"... there is a need to be prepared for additional investment in
baseload from 2013-14. Further, the most efficient means of
providing for baseload is to improve the commercial and policy
signals used by the private sector when investing in generation
capacity in New South Wales. My key recommendation,
therefore, is that the Government of New South Wales divests
itself of all State ownership in both retail and generation. ..."

That is, Professor Owen, having looked at the National electricity market, carbon-trading schemes present and planned, the need for increased baseload power generation, and the budget, has recommended NSW sell its electricity infrastructure.

How does this fit with Morris Iemma's prmise on 9 May? Professor Owen raised the possibility of long-term leases to power station plant to private companies as way out. He argues that a long-term lease will encourage private lessees to maintain the power stations. But this doesn't solve the problem of the extra need.

The solution, it seems is to remove the pricing caps, to allow private companies to build new power stations, while politicians tell us that "iremoving the pricing cap will have no effect because competition will keep the prices low". If that is the case, they should be left. Fair go - they must think there's one born every minute! The NSW ALP government is really looking to avoid investment in infrastructure that would provide essential service (electricity) to the people of NSW.

By so doing they will make the budget look good (Treasurer Costa beams with happiness) while avoiding having to (gasp) use the State's AAA+ credit rating to borrow money to provide long-term investments to benefit the people of NSW.

The sell-off is so that the State Labor Government can avoid their responsibility to the people of NSW. They ought to be ashamed.