Selling NSW govt electricity networks could raise $35 billion

The NSW government could raise $29 billion – $35 billion, if not substantially more, from sellng its electricity distribution and transmission networks. These numbers come from summing the RABs (regulatory asset bases) of the four businesses and applying a conservative multiplicative factor.

This is a very large amount of money. Careful consideration should be given to whether devoting this capital to electricity networks is its best use, particularly in light of the need for transport infrastructure in NSW.

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5 Responses to Selling NSW govt electricity networks could raise $35 billion

  1. paulmcardle says:

    Sacha

    We’ve not been sure what to do about highlighting the potential for ownership change in NSW on the 2011 Issue of our “Power Supply Schematic”, which is just nearing completion.

    More probable is the potential for a “3 into 2” merger of the distribution businesses.

    Any suggestions appreciated – the draft is here:
    http://www.marketmaps.info/2011-09-09-draft-of-PSS-MarketMap.pdf

    Cheers

    Paul

  2. Sacha says:

    Thanks Paul, I’ll have a look.

    Recent newspaper articles suggest the 3 into 2 merger is still happening (I read in newspaper articles that the NSW budget incorporates forecast savings from the merger). I wonder what savings coukd be realised in practise from a merger.

    cheers
    Sacha

  3. Sacha says:

    Hi Paul,

    Detailed diagram! I suggest that it reflect the actual state of affairs as at the date of publication and that it have an explanation of NSW Govt policy that would likely affect the networks (the merging 3 into 2).

    As for potential privatisation of networks, there’s no govt policy supporting that yet, there are just moves towards allowing govt to make that decision (special commission of inquiry, govt advisor comng out in support etc). Do you want to say that a special commission of inquiry is looking at the whole industry including options for reform? The inquiry could recommend almost anything, and then it’d be up to govt and potentially parliament about what policy to adopt.

    Do you want the diagram to reflect changes that might occur or ones that are very likely to occur?

    In relation to the 3 into 2 merge, do we know what areas the merged entities will cover? The Premier has referred to the Qld situation so they may be looking at a network covering Syd-New-Wollongong network and one covering everything else.

    Sacha

  4. Paul McArdle says:

    Thanks Sacha

    The “Power Supply Schematic” will reflect our understanding of the nature of the Generation-Transmission-Distribution at a given instance in time (i.e. the time when we go to print).

    We won’t really be focusing on potential privatisations, as they are some way off (if they happen) – but we are considering what to do about the potential for DNSP consolidation.

    Paul

  5. Sacha says:

    Hi Paul, it’s good you went that way as the NSW Government has now made a decision to retain the network businesses in public ownership.

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