Are NSW electricity prices going to rise?

Published: March 09, 2009 - 10:00 AM

Sale of NSW energy assets could lead to higher energy bills for households

Analysts say AGL and Origin Energy are set to increase their presence in the NSW electricity market as the global financial crisis reduces competition for the NSW energy assets.

The NSW Government recently announced revisions to its plans to sell the state’s energy retailers and the rights to power stations output to private investors. The Government is hoping to maximise the return to NSW taxpayers by selling the energy assets to the highest bidder, but the tough economic climate is likely to reduce the number of bidders in the sale.

All 3 of the major NSW energy retailers are up for sale – Energy Australia, Integral Energy and Country Energy. Analysts predict that once the sale is complete it is likely the Government will amend current rules to allow price increases from the existing regulated rates. While this will benefit the successful purchasers of the NSW energy retailers, it is bad news for consumers who will have to contend with higher energy bills.

AGL and Origin Energy are both in the fortunate position of having cash to spend after the sale of assets last year. This makes them the strongest contenders in the auction for the NSW energy asserts. Alison Walter of ShopAround.com.au said that "In New South Wales, it will be very important for consumers do their research and make sure they compare electricity companies to ensure they are getting the best deal."

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