From the AFR:
Networks NSW, the holding company for the state’s three electricity distribution network companies, told the Australian Competition Tribunal that unless the court overturns a pricing decision by the Australian Energy Regulator it will be almost impossible for the NSW government to carry out its key election pledge to sell long-term leases in the power networks.
“This would not be a viable proposition for investors who would be asked to commit new funds to an operation generating low or negative equity returns.
The AER says that NSW state-owned networks can afford the price cuts because in the past they were allowed to spend inefficiently on unnecessary “gold plated” investment and employed far more unionised full-time workers than their more equivalent private networks in other states and overseas.
Good for the AER. I’ve written many times that the “polls and wires” utilities in NSW and QLD are responsible for huge mal-investment in the past decade that was behind most of the power price increases in the east, from the Garnaut Review
And sent utility sector productivity into the dunny, from the Productivity Commission:
The pressure was always for the AER to squib its responsibilities to consumers by bailing out the mal-investment via price increases which would fatten up the privatisation. So far it has done well and should not give in.
