NSW Labour Government’s Sell Off of Electricity Grids Will Cost Consumers an Arm and a Leg.

The following report by Andrew West and Robert Wainright- Public Float for Power Sell-Off – appeared as a front page story in the Sydney Morning Herald on Thursday March 6, 2008. It is further proof that the Labor Government has the same in-house inquiries as the Liberal-National Coalition that supports privatisation and the continued selling off of the farm.

A twin public float of the State owned electricity assets, and a sweetener of up to $10,000 worth of shares for some employees, are being promoted to break the deadlock over privatisation that has paralysed the Government. The proposal from the former Labor Premier Barrie Unsworth, chairman of a special committee on privatisation, however, is set to inflame unions and community groups because it succeeds the Government’s original plan to lease out power stations. The Herald understands that at last night’s meeting of the committee Mr Unsworth presented a proposal to consolidate three publicly owned power owned power stations into two companies and link them with power retailers. The two new companies would go on the market in an initial  public offering. A source told the Herald that Mr Unsworth recommended floating two separate companies because of public concerns about the dominance of a single suppler on the market. “I imagine that Victoria, for example, would have concerns about a single, monster company on its doorstep”, the source said. To sweeten the deal for unions representing 14,000 power workers, staff would also receive up to $10,000 worth of shares as an incentive payment, depending on their length of service. Far from being an ice breaker, any proposal that involves selling power stations as well as power retailers, is likely to be rejected by unions. Even the Treasurer, Michael Costa, the strongest proponent of privatisation, has only pushed for leases of between 55-99 years on the stations. Sources close to the committee say the Government would merge the assets of the three public corporations- Delta Electricity, Macquarie Generation and Eraring Energy into two companies, roughly equal in size. The Herald understands one option is to carve up Earning and merge it’s assets into the other two. The new companies would also incorporate the rich assets of the three publicly owned retailers- Energy Australia, Integral Energy and Country Energy- and then be released into the market in a Telstra-style float directed at small investors. The Government has tried to persuade unions to support a public float, but last month union leaders rejected it. The 11 member committee, with representatives from the Government, community and environment groups, and unions, was locked in talks for more than three hours last night, trying to complete its recommendations, which has been handed to the Premier, Morris Iemma.