Ominous noises coming from the New South Wales state government as they plan to sell off this state's power generating structure.
Generating electricity has long been a basic cornerstone of state responsibility - and in the past it has been a nice revenue earner adding to the state coffers.
Times change - and global warming has shone the spotlight on coal burning power stations and the increasing need for more power generation in the months ahead. A new station is under construction in Wollongong and this is gas fired to reduce emissions - but it was initially designed as a backup unit to cut in at times of peak overload. Being gas powered it is more costly to run than a coal fired unit.
This state is tending to follow what is happening in other states, where governments are selling off power generation to private enterprise. They are constructing a buffer against the day when that private consortium needs to construct new power stations - and the environmental lobby yells blue murder and demands that the plans be dropped in favour of solar, wind and wave units. Unfortunately, the public mood tends to agree with these Greenies and ignores the fact that neither can absolutely guarantee peak load capacity which can only be provided at this time by coal fired units. Obviously, that support will erode the day the lights go out !
Another spectre terrifying the state government is the question of nuclear power. The state would prefer that question to be decided between a commercial power generating entity and the Federal government - with the state as an innocent bystander.
The biggest immediate outcome for the average taxpayer will be the price of power if the generating stations pass into private commercial hands. Wherever this has happened - power charges have risen sharply - and that is the big difference between commercial or government control.
A prudent commercial company would set aside profits for the day when more capacity is needed and new stations need to be built. The government is in the happy position of being able to fund such needs from other sources - stamp duty, traffic fines, petrol taxes, general revenue - or even float a loan in the taxpayers name.
Prudent planning has never been a term attributed to government thinking.
So - we can expect higher power charges if the sell off goes ahead - but there is also one other question. The value of the state power generators runs into the billions of dollars. If the sell off proceeds - just what does the state government plan to do with that money ?
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