After all the kerfuffle caused by the privatisation push, it’s hard from where I’m sitting at the moment to see Rees moving forward with it unless he can reach some agreement with the unions. I think the Premier’s position is too vulnerable for him to be going out on a limb without taking both the party and the union movement with him.

Judging by the results of the vote on privatisation at conference and the volume generated by the union campaign, it’s hard to see him managing to do that, But, this is NSW politics after all, and stranger things have happened!

The Rees gov’t has made no commitment either way on electricity privitisation. Still waiting…

One point to keep in mind is the Iemma/Costa Plan B, to sell only the retailers and not the generators. This would not raise near as much money for the gov’t, but has different policy implications than any sale including generators. For example, retailers buy from the national energy pool, which does not identify the carbon intensity of the energy purchased, so coal concerns are taken out of the equation.

On the politics of this, most job losses for privitised retailers will happen in call centres. The majority of these call centres are Western Sydney or regional areas, meaning the community impact is higher (because employment levels are already lower in these areas). However, this also lowers the number of unions who are passionately opposed (i.e. their member base is not affected). And Ben Kruse of the USU will get louder.

The Liberals will privitise after the next election, they have stated as much. This might weigh on any consideration by Rees.

I suppose what’s worth considering here is that if an emissions trading scheme is introduced in Australia (as the Rudd Government looks set to do), all electricity sellers will have to pay for permits for their emissions. Assuming that there is only going to be set amount of these permits available, this effectively means that these companies may actually be forced to invest in green technology in order to meet consumer demand. This would probably be a good thing.

Matthew, to my knowledge it’s been shelved by Nathan Rees in the wake of the Iemma/Costa leadership debacle. Happy to be corrected if this is not the case – perhaps we’ll have to wait and see what happens with the mini-budget that the Rees Government is due to deliver shortly.

It just seems like common sense that a private company would be even less inclined to reinvest in plant and equipment – particularly new green technology. In fact, they’d almost have a duty to their share holders to flog every last cent out of aging power plants. And what will happen when a government electricity is no longer there to keep the market in the other states honest? I’m happy to be corrected on this, but it’s my understanding that NSW exports vastly more electricity to the other states than it receives.

I still have to be convinced that you can have efficient markets in electricity. Yes electricity on the national grid is traded every few minutes, but is that really evidence of healthy competition, or is it just more convenient to buy electricty that way?

I’ve had a bit of a spray about this over at LP.