Poles and Wires Privatisation - Electricity Distribution Network Sell-Off in NSW

Interesting to see in media reports today that National Party MPs opposed to the sale of the State's poles and wires are calling for a referendum on the issue, saying this is the only way that Premier Baird will be able to claim a mandate for the privatisation of the electricity distribution network. This has been my position from the outset, as stated in this press release of April 22, issued following Baird's sudden rise to power and the subsequent Cabinet reshuffle.
http://www.gregpiper1.com/images/2014-04-22_Hunter_Region_the_loser_in_Cabinet_reshuffle_-_web_version.pdf


To claim an election win as a mandate is disingenuous, particularly if the electors haven't been fully informed of the implications. It is likely that the next election will see a "natural" reduction in seats held by the Coalition, maybe 10 to 15 or worse if they have more bad news such as from the ICAC. A 20 seat loss (the worst case scenario) would still give the Coalition a majority of 7 in the Legislative Assembly.

I can't accept that a win where there with a reduced number of seats can be used to claim a mandate. These assets have been built up over many generations, they return a healthy dividend to NSW and are akin to Blue Chip shares giving a safe and reliable return while also keeping them away from the pressure to maximise commercial returns for the benefit of shareholders. The poles and wires are a natural monopoly and as such any claim of downward price pressure from privatisation is a furphy as there will be no true competition.
 


To claim an election win as a mandate is disingenuous, particularly if the electors haven't been fully informed of the implications. It is likely that the next election will see a "natural" reduction in seats held by the Coalition, maybe 10 to 15 or worse if they have more bad news such as from the ICAC. A 20 seat loss (the worst case scenario) would still give the Coalition a majority of 7 in the Legislative Assembly. I can't accept that a win where there is a reduced number of seats can be used to claim a mandate. 

These assets have been built up over many generations, they return a healthy dividend to NSW and are akin to Blue Chip shares giving a safe and reliable return while also keeping them away from the pressure to maximise commercial returns for the benefit of shareholders.

The poles and wires are a natural monopoly and as such any claim of downward price pressure from privatisation is a furphy as there will be no true competition.
It is good that there are some members of the National Party willing to speak out against this part/full sale/lease or other clever mechanism, because even though many members of the Liberals will feel similarly, they are unlikely to openly oppose it, having seen what such a defeat led to with the ALP and then Premier, Morris Iemma.

Anyway, good on the Member for Monaro, John Barillaro, for saying what most people in NSW would agree with.

Electricity Infrastructure upgrades

There's no doubt that making the right political decision for the long term can often be tough. Premier Rees and Ian MacDonald, as Energy Minister, have another hard sell to do, arguing the case for a greatly needed upgrade to our power infrastructure with NSW residents having to pay more for electricity to cover the cost.

During the great Power Sell-Off debate, I had contact with industry sources who raised just this issue, that the infrastructure, particularly in high density and long developed areas such as the Sydney CBD, had been badly run down.  It was assumed that this would constitute part of the "poles and wires", the transmission network, that the Premier of the day and Michael Costa were arguing would be be kept in public hands.  The hidden liability was never discussed.

Well, the fact is that the infrastructure does need upgrading.  But doesn't that beg the question as to how this came about particularly as the Labor Government used, and still does, our energy utilities as General Revenue cash-cows for so long?

Common sense says that dividends should only be payed after running costs and depreciation have been paid for.  If this had been done it would seem unlikely that we could now be in this position.  Some of this cost might be for new and unforeseen needs - most of it is to fix the years of neglect of Labor.  The unfortunate fact is that Labor aren't that good at business; the other side of the coin of course is that the Liberals when in power have been too good at business!  In the end I have no doubt that we will have to pay more for our power, and perhaps that will help us reduce our usage - that doesn't change the fact that utility income should have been paying for, or saving for this, for many years.