NSW Government Sells Electricity Assets
The New South Wales government sold a large portion of NSW electricity assets for $5.3 billion. It has been announced today that Origin Energy will buy the retail assests of Integral Energy and Country Energy in an agreement worth $3.25 billion. TRU Energy has also confirmed that it will purchase Energy Australia’s retail business for over $2 billion.
Origin is also entering into GenTrader agreements with Eraring Energy and Country Energy even though Eraring Energy directors have walked out in protest over the sale price. This deal will mean Origin Energy will become Australia’s largest energy retailer, with over 4.6 million clients.
Energy retailer AGL failed to win any assets, which knocked its shares down 4.7 percent in a flat broader market on Tuesday. AGL stated they could not justify a higher bid and will face $13 million in costs related to the failed bid process.
TRUenergy will acquire Energy Australia as well as the Delta Western GenTrader bundle for the Mount Piper and Wallerawang power stations, and three power station development sites for $2.035 billion.
The deal is set be finalised on March 1, 2011. So what does this mean for NSW consumers?
Experts have said that this is an excellent outcome and will put NSW in a stronger position financially and strengthens the state’s balance sheet. However for clients, some experts are not expecting a great outcome saying the sale will lock in inefficiencies, hold back competition and result in power prices becoming higher than other states for decades to come. However the Government has reinforced the fact that prices will continue to rise with or without the sale of these assets.