The New South Wales government sold a large portion of NSW electricity assets for $5.3 billion. In an agreement worth $3.25 billion, Origin Energy will buy the retail assets of Integral Energy and Country Energy. TRU Energy confirmed that it will purchase Energy Australia’s retail business for over $2 billion.
Origin will enter into GenTrader agreements with Eraring Energy and Country Energy even though Eraring Energy directors have protested about the sale price. This deal means that with over 4.6 million clients, Origin Energy will become Australia’s largest energy retailer.
Energy retailer AGL didn’t win any assets, which dropped its shares to 4.7 percent in a flat broader market. AGL stated they could not justify a higher bid and will face costs of $13 million related to the failed bid process.
TRUenergy will acquire Energy Australia as well as the Delta Western GenTrader bundle for the Mount Piper and Wallerawang power stations, and three more development sites of power station for $2.035 billion.
The deal is planned to be finalised on March 1, 2011. What does this mean for NSW consumers?
Experts say that this is an excellent outcome and will put NSW in a stronger position financially and strengthens the state’s balance sheet. However, some experts are not expecting a great outcome for clients saying the sale will lock in inefficiencies, hold back competition and result in power prices becoming higher than other states for decades to come. However, the Government has reinforced the fact that prices will keep on rising with or without the sale of these assets.