Power prices discounted under electricity sell-off
Wednesday, 11th June, 2014
Power prices will be discounted and billions will be pumped into roads, schools and hospitals under the NSW government’s controversial plan to sell electricity networks.
Forty nine per cent of the state’s poles and wires will be sold on 99-year leases under a policy approved by Liberal and Nationals MPs following heated party room meetings yesterday.
But in a win for the Nationals, country-based Essential Energy - which maintains the nation’s largest network - will be exempt from the plan.
The coalition will take the sale to the March 2015 election and if it wins approval, Premier Mike Baird said he anticipates the transaction being completed by the end of 2016.
The finer details of the sale are expected to be announced within weeks.
Detailed plans for the infrastructure projects are expected to be outlined by November.
Mr Baird was unable to offer any firm dates for when the infrastructure would get built but said it was part of a 10-year plan.
A second harbour rail crossing is expected to be created, extending the North West Rail Link through the CBD and on to Bankstown.
At least $6 billion of the sale proceeds would be spent in regional NSW, including roads funding and $2 billion would go to schools and hospitals.
Electricity network prices would also be discounted one per cent off the forecast regulated rates until 2019 under the plan - though it remains unclear how much of that would be passed onto the consumer.
But the bold promises may not be enough to woo jaded voters, with Mr Baird anticipating a backlash amid fears of rocketing power bills and public sector job cuts.
“It may not be popular in parts, indeed it definitely isn’t popular in parts,” Mr Baird said.
“But I am determined to do what’s right.”
The sale was approved despite a major coalition split, with the Nationals forcing Mr Baird to exempt Essential Energy, amid fears it would cost hundreds of jobs in country NSW.
Relieved local MP John Williams said yesterday that the National Party met for more than three hours to debate the proposal.
“We’ve secured Essential Energy ... it will be excluded from any partial privatisation,” he said.
Opposition Leader John Robertson said the sell-off could lead to public sector job cuts and tax rises after the government loses annual dividends from the assets, which last financial year totalled $1.7 billion.
“This is not a magic pudding - you can’t sell an asset that delivers an income ... and not have an impact on frontline services,” he added.
Unions believe privatisation will lead to higher power bills.
Unions NSW chief Mark Lennon said the proposal would cost the coalition when voters head to the polls in March. -AAP/BDT