Australie : December 16, 2008

The State Government hopes to finalize the sale of its electricity assets by the end of 2009. The Government was forced to scrap plans to sell the electricity generators this year. Under the amended plan, they hope to sell three major NSW retailers which include Energy Australia, Country Energy and Integral Energy. The Government also plans for power station development sites and trading rights from the generators to be included.

The plan is not without its problems. Due to the current worldwide economic turmoil and the volatile global equity markets, the outgoing Treasury Secretary, John Pierce, said that the financing of the sales would need to be changed. As a result, bidders will be required to use more cash and less financing to fund their prospective purchases.

It is interesting to note that even though the market trading rights of the power generators will be sold, the Government will still be exposed to significant risks attached to volatility in the wholesale electricity market.

Green party MP, John Kaye, said trading rights would give the purchasers a majority ruling over the activities of the State-owned generators. At this stage, it is not clear whether the sale of the retailers will increase competition or just increase the cost associated with each electricity contract. Large electricity consumers will need to be cautious in negotiating their upcoming contracts as pricing continues to climb at a rapid rate.