Why would Iemma government go down this path? They have previous form in seeking money handouts. (like his instant sign up to the Howard Water strategy).

Here Mr Iemma wants to ditch responsibility by leasing all his assets and then flick-passing the hard decisions about replacement of ageing generators to the private sector who will be guided by the market.

Soon there will be mandatory changes to the coal industry in which market signals will be added to discourage building coal-fired power stations. Mr Iemma hopes to avoid these troubling issues by letting the market decide what’s best.

Unfortunately the market has already failed. That is why we continue to use coal, only since it is the cheapest source of power. The market hasn't priced-in the destruction of the planet.

Mr Iemma hired a worthy economist to say “yes we need a coal fired station because other forms of power are too expensive at present”. And "yes the private sector should be allowed to run them because the private sector should be running any government agency that delivers revenue”.
No mention of the fact that NSW now has a highly efficient world-class electricity system delivered by the public sector.

Mr Owen also claimed there would be an effect on the AAA Credit rating if NSW spends an (inflated) $15 billion on generation capacity. This is despite the fact that (as Mark Byrne has said) the credit rating should be improved by responsible investment in revenue-generating long-term energy infrastructure.

The Iemma strategy is so bad for the planet that Mr Iemma must have a plan to go ahead with the coal fired power station against all opposition in the hopes that a Rudd Government will move in and buy him out.

We need actual achievements in the fight against climate change, not Machiaevelian manoeuvres. Mr Iemma should now declare that there will be no coal fired power stations in the options considered by the NSW Government, just as he already said “no” to the nuclear power options. In the climate change future, sound logic must trump dodgy economics.

As an electrician and an ETU member who has worked within the NSW Electricity Commission jobs, I hope that the power industry is privatised as soon as possible. The rampant drunkeness, incompetence, feather bedding, wholesale theft, and outright bludging, has got to be seen to be believed.

Want an example? The 330 KV yard at Kemps Creek was erected with less than a dozen private enterprise electricians. It took 36 Elcom electicians to test the installation. They worked in teams of six. One bloke went up the isolators to short out the control wires, one bloke holds his ladder, one bloke holds the walkie talkie.

In the control room, one bloke holds the multimeter, one bloke holds the leads of the multimeter, and one bloke holds the walkie talkie.

The Elcom supervisor was drunk EVERY DAY.

Elcom HV switchyard Oberon. Private enterprise elecricians start work in Oberon at 7 AM on Monday's and finish at 3PM on Friday's. Elcom workers start at 7AM on Monday IN SYDNEY and then drive to Oberon, stopping for a very leisurely lunch in Goulbourn, arrive at job when private electricians are packing up. Elcom workers pack up their trucks on Friday morning and are on their way home at 9PM Friday.

LAH allowance for priate electricians was $98 bucks a week, Elcom workers got $58 A DAY.

No wonder Socialism didn't work. Only space prevents me from telling more. After witnessing worse idiocy on another ELCOM project, I resigned from the ALP and became a Capitalist who now votes Liberal.

the problem isn't socialism-bad, capitalism-good. both are bad because power is concentrated in a few hands. the only system that allows people to monitor and sanction officers of state is democracy. oz hasn't got it, doesn't know what it is, and isn't going to improve any time soon.

unfortunately for ignorant people, the world is a little more complicated than they've been told, and optimum solutions are seldom found by accident.

so oz will be ruled by incompetent and corrupt labor governments until the voters have their faces rubbed in this incompetence and corruption. then they'll elect an incompetent and corrupt liberal government. sheep might figure this out, and look around for a different system, but ozzies are too dim.

Thanks for your comments. I'll have another article (not sure where yet) in the next week critiquing the concept of baseload power, and maybe another the week after asking how much we're prepared to pay, in environmental as well as economic terms, for 99.99% reliability in the electricity network — ie, would we settle for 99% if it saved money and emissions?

Are all the issues Redneck mentions a factor of ownership or of management?

No doubt there is a case for a review of many work practices in many industries but is privatisation the answer?

The likely post-privatisation scenario would be -

The number of full-time workers would reduce and the number of contractors would increase. There would be a significant reduction in the existing skills-base as the more experienced and qualified staff take their packages and leave.

After an initial surge, the amount paid to contractors would be progressively reduced as they bid against each other for a limited and decreasing amount of work. Many will be forced to include non-profitable or undesireable work as part of larger contracts.

Most former contractors will eventually end up working as psuedo-employees via labour-hire organisations or for larger contractor organisations rather than as direct independent operators (but at lower pay rates and without any tax benefits).

There will be a significant cut in the maintenance budget and a general decline in company performance with increased or protracted outage times and longer response times.

The notion of profit before everything else will be paramount.

Well, at least that's been my experience with Telstra and from information I've received from people in other privatised or corporatised utilities.

The promises of a privatised corporate nirvana are as likely as the alternative socialist paradise suggested by others.

If there are problems with how things are working now, then fix them. Don't use them as an excuse to justify some other agenda.

The bottom line it that it's YOUR assets that are being sold off for short-term political gain.

Well done Redneck. Given that elcom was abolished in 1995 your certianly up to date on the electricity industry. Nothing like unprovable annecdotal parables to bolster the faith based belief of government bad, free enterprise good. The wholesale off of state assets whch provide essential services has had the same outcome in every juridistiction where this has occured. Massive layoffs and increased prices for consumers. in the UK energy bills for average consumers will top $3000 per year in 2008 and it is expected that nearly 25,000 thats right 25,000 deaths will occur because of fuel poverty. Deregulation in the US saw the extremes of Enron. Lets not fool ourselves. The proposal to hand these essential utilities over to private enterprise is absolutely linked to an already existing COAG commitment to deregulate retail electricity prices. Given that the process of moving to national regulation is well under way there will be absolutely nothing the NSW government will be able to do despite all Costa's assurances. So welcome to the brave new world so so similar to the situation which saw the NSW government establish the Electricity Commission in the first place. a world where consumers are held to ransom and the poor will be unable to afford the essentials of life.

California's power shortages were certainly caused by free market pricing on the generation side, and government restricted, unsustainable pricing on the retail side. Price control NEVER works and will always eventually lead to shortages!

I don't see why the electricity industry is some sort of mystical "essential" being that can only operate effectively if state owned.

We certainly don't need public ownership of food production and distribution, which is an essential industry, so why is power different?

One could argue that the prices at present are too low due to the fact that sufficient re-investment in infrastructure is not occuring due to the special dividends which strip money out ot the industry into general revenue. Thus we do not have a sustainable position at present.

Having recent dealings with one of the generators, I think that having some profit motive would be great, as opposed to the petty tick off the boxes, focus on the most trivial matters attitude I encountered.

The decision regarding a future power station is needed now, due to the long lead time in developing such capacity. Coal is the only viable base load generating fuel we have at present, as long as the station is configured to be as efficient as possible, and can accomodate carbon capture, what difference (other than political grandstanding and ideological) does it make.

I just want the lights to come on when I want.

I wouldn't say it was because electricity generation and distribution was 'essential' that many have argued against its privatisation.
The big difference between food and electricity is that as a consumer I can easily and meaningfully choose between several different food suppliers, hence market forces can operate very effectively to ensure that high quality and low prices are maintained.
With electricity, it's simply not the case that I can decide I'm unhappy with the supply I'm getting from Loy Yang B or Liddell Power station and choose another (though I have chosen to go for 100% renewable energy - an option that undoubtedly would not be available were it not for government legislation and incentives). They're all connected to the same grid, and the resource is effectively pooled. In that sense it's more like water - no-one would (sanely) suggest that a city's reticulated water system should be entirely run a private operator whose was only obligation was to maximise shareholder profit: profit could obviously be increased by reducing the amount of expensive purification and testing needed to ensure water remained safe to drink and wash with, and consumers would have no realistic option to reject that product and choose a different supplier.