Billions to lose in power sell-off

SMH Brian Robins November 15, 2010

The NSW power industry has generated nearly as much money for the state's taxpayers over the last 15 years as Victoria raised from the sale of its power industry, budget figures show.

Victoria reaped an estimated $21.7 billion from the sale of its power industry which began in 1992 and was finished later that decade.

Since 1996, taxpayers in NSW have received at least $15 billion in taxes and dividends from the state-owned power industry, while retaining full ownership of it. Bids close today on the sale of parts of the industry. The sale is expected to generate up to $10 billion, with the government retaining control of all the "hard assets".

For sale are the three power retailers – EnergyAustralia, Integral Energy and Country Energy – along with output of the three generators – Macquarie Generation, Delta Electricity and Eraring Energy – and some development sites. Not for sale are the "poles and wire" high voltage transmission network, the local distribution network or the power generators.

The government's electricity assets are highly profitable and a significant contributor to the state's finances, supplying $1.2 billion this financial year alone in dividends and taxes. As well, a further $544 million this year, rising to $798 million by 2013-14, is budgeted to be raised from a guarantee over the borrowings, mostly of the power companies.

"In the last few years, before the recent IPART-approved price rises, in dividend and tax returns from these assets, the state government has achieved a return of 24 per cent per annum," Bob Walker, a professor at the University of Sydney, said.

"That means that any sale price is likely to be dwarfed by the potential value to taxpayers from retaining these assets."