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Ai supports deeper private sector involvement in NSW electricity

18 December, 2007

“The Australian Industry Group strongly supports Premier Morris Iemma’s announcement of a deepening of private sector involvement in the NSW electricity sector and congratulates the government for being decisive in taking on a hard issue. We also support the maintenance of firm regulatory supervision in the industry,” Ai Group NSW Director Mark Goodsell said.

“The decision to sell the electricity retail businesses and to enter into long-term leases of generation capacity is good public policy.  It will underwrite the development of the electricity industry at a time when it is in need of considerable capital injection.

“With the electricity sector shifted to a more competitive and dynamic operating environment, NSW will experience broadly-based benefits.  The management of the sector will also be liberated from political and budgetary constraints that have been part and parcel of its place as a state-owned enterprise. 

“Ai Group’s membership includes many large-scale industrial users of electricity and all our members rely on continuity of electricity supply at competitive prices. It is therefore vital that service and pricing levels be maintained and improved. Ai Group is confident the regulatory arrangements announced today will complement the oversight arrangements in the National Electricity Market (NEM) to deliver the excellent standard of service required by industry.

“We are also confident that environmental regulation will potentially operate more effectively free of the conflicts of interest that can arise when the public sector is both the regulator and the operator of regulated businesses.

“Ai Group also notes that the Government intends to allocate a substantial share of the proceeds of the measures announced recently towards the development of much-needed infrastructure. This includes the proposal to create an intergenerational fund to replace the flow of dividends that would have been paid to the NSW Government. Additional investments in the State’s infrastructure will support the longer-term development of the State and assist in raising living standards and improving general economic conditions. Ai Group supports the concentration of public sector effort on these areas rather than on running the power industry,” Goodsell said.

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