Premier Mike Baird is risking his political career in his desire to fight the aggressive union campaign against electricity privatisation. But bidders for the electricity networks will also be required to sign a price guarantee that their costs in 2019 will be lower than they were in 2014.

According to Baird, the transactions won’t go ahead unless Professor Allan Fels, the former chairman of the Australian Competition and Consumer Commission, signed off on it.

Privatisation within electricity networks has voters anxious

Baird is showing that he is aware that voters are still anxious about the plan to partially privatize electricity networks even if $20 billion has already been promised for the development of the infrastructure.

“Allan Fels is someone who has stood up to the toughest corporations in Australia and he brings a huge amount of respect across the political divide and the country,” says Baird.

“We’ve heard the concerns that have come from the community and I want to provide an additional assurance,” he adds.

But it appears that Professor Fels said he had no particular views on privatisation. As Electricity Price Commissioner, Professor Fels will examine the privatisation documents to ensure the transaction won’t raise electricity prices in the short, or long term.

Electricity Price Commissioner to ensure industry compliance

He will also monitor electricity companies every year to see if they are complying with the agreement. Fels said he had been a “price technician” since 1973 and has a neutral position on the subject of privatisation.

“I am always happy to be independent and stand up to governments and power companies if necessary,” says Fels.

In recent years, consumers had suffered from large increases in electricity prices. In this regard, Fels said that it was important to inform them about the impact of a change in ownership of the electricity networks, he said.

“I am confident that the price will come down, but I am there to provide an additional guarantee,” explains Fels.

According to Fels, the Australian Energy Regulator had issued a draft determination to “preset” NSW network prices at 20 to 30 per cent below 2014 levels for the following five years.

Number of Coalition supporters opposing electricity privatisation increases

“Some people are concerned that the actual privatisation transaction – making a bid – will in some ways inflate prices,” says Fels. “That seems to me highly improbable. The Australian Energy Regulator sets the prices and then the bidders know the price and how much they are willing to bid,” he adds.

It is worth noting that the latest Fairfax/Ipsos poll shows a third of Coalition supporters are opposing the plan to privatize the electricity network to fund infrastructure.

Incidentally, the numbers of Coalition voters opposing the privatisation plan rose to 50 per cent when infrastructure was not mentioned.

“There’s no doubt the unions want to maintain control and are spending huge amounts of money to put completely and utterly baseless lies to the people of NSW. There’s no doubt that is having an impact,” says Baird.

A major factor in Labour’s win in the Queensland election was attributed to electricity privatisation.

Photo courtesy of Kate Ausburn on Flickr