Releasing a government-commissioned report on NSW's future power needs that recommends privatisation of electricity production and distribution, Labor Premier Morris Iemma said on September 11 that his government would consider "part-privatisation" of the industry.
Iemma said he found the idea of selling off the retail licences of the state-owned electricity corporations Energy Australia, Integral Energy and Country Energy and the leasing to private operators of state-owned power stations "attractive".
Prior to the last NSW election, in March this year, both Iemma and his treasurer Michael Costa said that the ALP would not privatise the electricity industry.
In 1997 the then NSW Labor treasurer Michael Egan was howled down at the ALP state conference over an attempted $25 billion sell-off of the electricity industry pushed by him and then premier Bob Carr. The idea was dumped.
But the Iemma government is now seeking to revive it with the report by Curtin University energy economics professor Anthony Owen.
Commenting on the report, Unions NSW secretary John Robertson said: "I don't think the private sector is in a position to deliver electricity in NSW without having an impact on workers or the price for consumers."
NSW Greens MP John Kaye said: "This is an expensive and dangerous mistake that will commit NSW to an energy industry with ballooning [CO2] emissions."
"The Owen report's recommendations to privatise NSW electricity retail and generation services are madness", said Socialist Alliance climate change spokesperson Kamala Emanuel.
"Privatisation will only deliver job cuts and insecurity for the workers in the industry, worse services for the community, and less ability for the government to address greenhouse gas pollution.
"This is partially admitted in Owen's report, which recommends sweetening the privatisation deal by removing by 2010 the pricing controls that limit the ability of power companies to raise electricity charges."
Instead of privatising the industry, the government should use its ownership of it to carry out a swift transition to renewables, Emanuel added.
"The September 11 crash of the NSW carbon market shows the market can't be trusted to deliver greenhouse gas emission reductions. Instead, the government must act now to directly fund an expansion of wind, solar and other renewables and phase out reliance on coal.
"In the process, it must consult with the workers and their unions to ensure a fair transition for them and their communities, based on retraining on full pay and redeployment in the new industries we urgently need to build."
Owen's report assumes the building of coal or gas-fired power stations are the only option for the next 10 to 20 years.
"There are alternatives", said Kaye. "We can start now working on demand site management, phasing out electric off-peak hot water. If we do that, privatisation and new base-load plants will simply be unnecessary. The government focus should be renewable energy and energy efficiency."
NSW Total Environment Centre director Jeff Angel also accused Owen of failing to properly evaluate the contribution that could be made by energy efficiency. "As a result, it is only half a report and wrongly recommends a new base-load power station on an early time frame", Angel said. "A well-funded and strategic energy efficiency program could replace the need for an existing power station and defer the need for another, until greener alternatives are available."
Aside from renewables energy technology companies, NSW business groups welcomed Owen's report.
The September 17 Sydney Morning Herald reported that Costa's office had revealed that the government paid Owen $123,000 to produce the report and that US investment bank Morgan Stanley, whose recommendations on the power generation sell-off Owen adopted, was paid $275,000 in "consultancy fees".