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Disempowering Australians: Electricity privatisation (begun by Jeff Kennett) is a disaster

Inside a short video on privatisation of electricity. In 1994, the Kennett government disaggregated the SECV into five distribution and retail companies (absorbing the MEUs in the process), five generation companies, and a transmission company. Along with other state-owned utilities (such as the Gas and Fuel Corporation of Victoria), these businesses were all corporatised, then privatised between 1995 and 1999.

The only entities remaining in State Government ownership is the wholesale market operator Victorian Power Exchange (VPX) and the SECV shell which holds indentures for debts owed to it by brown coal development company HRL Limited, and pays Alcoa annual subsidies for its significant electricity needs. VPX was subsequently reorganised with its market and system operation functions being transferred to the National Electricity Market Management Company (NEMMCO) and its transmission planning functions being transferred to VENCorp (now Australian Energy Markets Operator - AEMO).

Currently, the Essential Services Commission of Victoria is responsible for the regulation retail businesses and the Australian Energy Regulator is responsible for regulating distribution, transmission and the wholesale electricity market. Source: http://en.wikipedia.org/wiki/State_Electricity_Commission_of_Victoria

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Comments

How is it even constitutional to sell of public assets, the jobs and economic benefits and jobs that belong to Victorians? Jeff Kennett is arrogant and full of bluff. He betrayed his electorate, and destroyed jobs and communities, and consumers are now over-paying for electricity power. The private companies are reaping profits too, from our rampant population growth, with up to 2000 new consumers each week.
The former Victorian premier and former Labor leader fronted the Channel 7 breakfast show to discuss the news that Qantas is cutting 5000 full-time jobs in an attempt to recover a massive $2 billion hole in its finances. "I support what Mr Joyce is doing. It’s not easy, it's certainly very tough and at least he’s trying to get the airline back on it’s feet. This isn’t a popularity poll. It's not good enough for two journalists or broadcasters, who I suspect have never employed a person in their life, to actually be sitting there questioning an individual who, in my opinion is dealing ...” he trailed off.

What's the point of keeping a foreign owned aircraft company "on its feet" if the benefits are not for Australians, when it's meant to be our airline!
Kennett is also behind the privatisation of the Port of Melbourne, and the government should ''put it out to tender very quickly''. He said his government would probably have sold it to further its infrastructure agenda if it had won the 1999 election. It's easy to sell off other peoples' property, and gain the accolades from the elite and business communities. Now they want easier access to 457 visa workers, while unemployment is increasing in our State.

Was Jeff's decision to sell off the SEC's assets one of the dumbest moves in the history of Victoria? I remember at the time calculating that the money paid, which was used to pay off Victoria's debt at the time, was equivalent to about $1100 per household. (It's been a long time since I did the calculation; but it was something like that.)

The business was broken into smaller, arguably sub-economic, pieces. The power generation components were sold complete with unlimited access to free coal. There is several hundred years' supply available and no financial incentive to reduce consumption of this zero cost consumable. Of course the carbon tax would have increased the cost of supplying electricity to consumers, but the consumers - not the generators - would pay. So still no incentive for the generators to reduce consumption.

Jeff laid the foundation for businesses that were paid a Regulated rate of return on the value of their assets. Hence they had an incentive to GROW the size of those assets to GROW the return. I'm not sure of the exact details, but the return was somewhere between 5% and 7%. Singapore Power now owns the transmission infrastructure. They had a vested interest in expanding it, given that their cost of capital overseas was far less than the Regulated Return.

But hang on. We have PV Solar and a need for distributed generation using alternative energy. This will reduce the demand on the transmission infrastructure at the same time as the private businesses that now own it want to AUGMENT it for their vested interest.

So that one off payment of $1100 per household has sabotaged responsible planning of this essential component of social infrastructure.

Thatcherism Australian style. Conceptually absurd vandalism from start to finish..................??

I heard this strange noise and a dog howling. It’s the Grand Prix. I forgot to leave town. The dog sounds desperate.
Nowhere to run in Melbourne.