North West Electricity - Sydney's 1955 electricity heist revisited

On 23 August 2017 under the headline Inverell’s light bulb moment, the Inverell Times carried a piece remembering the North West County Council, the organisation that used to provide electricity to the North West.

 In 1995, after 50 years of electricity generation and distribution, the NWCC, trading as North West Electricity, and its $9m reserves were taken over by the state government. It became a larger organisation called Northpower, administered from Port Macquarie.

On 1 January 2001, Northpower was merged with the two other country electricity retailers (Great Southern Energy, Advance Energy)  formed after the forced acquisition and closure of all the electricity county councils. On 15 December 2010, the then Treasurer in the NSW Labor Government, Eric Roozendaal, announced that the retail division of Country Energy (including the Country Energy  brand) was to be sold to Origin Energy as part of a A$3.25 billion deal. As part of the sale of the retail business the electricity distribution division was separated from Country Energy and re-branded as Essential Energy on 1 March 2011

The original asset heist was justified on the grounds that these were state owned assets; that the Country Councils were not yielding a proper return from those assets; that while profitable, the Country Councils were too small to be viable in the new emerging national electricity market; and that the takeover would benefit consumers by lowering prices.  

The takeover came with costs to the North West. It lost the reserves built up from trading profits, as well as the contributions the NWCC had been making to local activities. The Ashford power station that had been locally funded was decommissioned, while both head office and support jobs were lost. Sadly, the expected benefits never eventuated. Sydney took the reserves, borrowed against the assets and then finally collected the money from the partial privatization. Little if any of that money came back into the North West, while there is no evidence that I know of to suggest that consumers benefited. If anything, the reverse seems to have been the case.

Back in 2010 in Sydney's 1995 electricity heist, I provided details of the policy and political background to the changes. Seven years' later with current problems in the energy marketplace, the changes seem even more suspect.