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Wednesday, January 19, 2011

Electricity sell off bill will be shocking to NSW customers

I wanted to quickly address some of the key points about the NSW electricity sell off.

The first thing we all need to understand is that for around two decades the prevailing chatter around NSW parliament has been about the important need to sell off energy production, the generation side, as well as the distribution and also retail sides of things before things got expensive to repair.

Now we need to understand the two main points raised about this:
The first one is that the Labor government telling the public that it believes it can't run the electricity system as well as private enterprise.
Don't forget that one when you vote.
The second point is that someone needs to put into the system around ten or more billion dollars for new infrastructure, repairs etc.
And because the NSW Government doesn't want to find that money they are selling off a public asset in need of repair but the elephant in the room is no one wants to tell the customers where they money will actually come from.

It will be user pays, and anyone in NSW wanting to continue to use electricity not only will have to front up twhatever you get charged on your bill to repair an aging electricity system, but we will also have to cover over inflated management costs, watch profits go oversees and watch our electricity reliability dive.
But before all that bites too hard, in March the Labor party will ask the public to vote them back in to thank them...Turn It Up. I'm Michael Robinson

Frankly I do NOT agree with that view.  Governments seem to have forgotten what being in government is all about.  They want to sell off what are essentially profitable public assets because they themselves can't bear to find money, money that private owners would.  So if private owners can find repair money, why can't governments?  Clearly they can but have made a policy decision .... you'd have to see it as a vote of no confidence in their own government wouldn't you?



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  1. you were told here

  2. Yes Yes WE know this, it was botched, but one does wonder if the best way to unscramble an egg is to buy it back and put it back in the shell or do you just accept the mess and regulate the industry and fix prices?

    Just at hand today NSW State Treasurer has admitted that NSW taxpayers were going to be liable for around $15 thousand million dollars of repairs if they owned the electricity system.

    As I said this week.

    So they are selling it and clearly telling private potential buyers that they will have to come up with that money from the magic money tree...

    ....there is no money tree, it is the electricity users of NSW who will pay, so instead of government's building and maintaining infrastructure, what the are now doing is selling it off and blowing the money and then walking away from their responsibilities.


    Power sale needed to save credit rating
    Brian Robins
    January 20, 2011

    NSW power sale will net $3b
    Treasurer denies NSW will get only a fraction of the $5.3 billion from power sell-off.
    Video feedbackVideo settings
    THE state government had to sell the state's power assets to avoid an automatic downgrade by credit rating agencies, the NSW Treasurer, Eric Roozendaal, said.

    Mr Roozendaal said the loss of the state's AAA credit rating would have cost taxpayers ''hundreds of millions of dollars'' in additional interest payments. Queensland was forced to sell billions of dollars in assets after it lost its AAA credit rating and South Australia cut services to avoid suffering the same fate, he said. ''Had we not undertaken the energy reform, we would have been downgraded.''

    Mr Roozendaal said the government will receive a net amount of $3.2 billion out of the headline figure of $5.3 billion received for the sale of the three electricity retailers and output from two of the generators.

    This does not take into account the estimated $1.5 billion cost to develop the Cobbora coalmine and the projected $1 billion subsidy in providing cheap coal from the mine to the generators, coupled with the $600 million in forgone dividends and tax receipts over the four-year budget forward estimates period.

    The government has put the cost of completing the transaction at $200 million, with another $200 million in provisions for employees being transferred to the new business owners.

    Mr Roozendaal said bids for the remaining assets - output from Macquarie Generation, along with Delta Electricity's central coast power stations - are due by the end of the month, with ''multiple parties'' looking to bid for the assets.

    Separately, the four directors of power generators requested by the committee of inquiry into the power transaction - Greg Everett (Delta), Warren Phillips (Delta), John Priest (Eraring) and Murray Bleach (Eraring) - have declined to attend hearings scheduled for Friday.

    ''It's up to the committee to determine its next step - whether to summons all of the directors, or just one or two,'' the committee chairman, Reverend Fred Nile, said. ''Maybe they know more of some of the problems, even if they didn't resign.''

    The committee called the four directors after criticism from the Premier, Kristina Keneally, that the committee had focused solely on directors who had resigned from the generators.

    ''Because of her intimidation, they've refused to appear,'' the Opposition Leader, Barry O'Farrell, said.

    ''Kristina Keneally is unsuccessfully trying to walk both sides of the street of this issue.''