NSW government to sell national electricity meter arms

The reorganisation of the NSW power sector has moved up a notch with the planned sale of the national electricity meter arms of Ausgrid and Endeavour Energy.

The state government is seeking to complete the sale of the power generation sector.

The proposed sale comes hard on the heels of the industry regulator the Australian Electricity Markets Commission calling for metering activities to be sold off from the energy distributors as part of a broader industry overhaul.

It also comes as Victoria’s metering sector is set to become contestable from 2015.

At present, energy distributors own the metering assets, but the door is to be opened to new players.

These changes will pave the way for the likes of Macquarie Bank to move in, since it is a significant participant in this sector in the UK already.

In New Zealand, for example, electricity meters are run as standalone businesses, with a range of companies participating.

The planned sale comes as the NSW government is expected to move after the 2015 state elections to privatise its power distributors.

Victoria has mandated the roll-out of so-called smart meters but the NSW government has held back, due to the high cost and uncertain pay-off.

Energy retailers are the natural owners and operators of metering services, Macquarie told a Federal government review last year. Via Capital Meters Ltd, it is a large player in the UK, where it has financed an unspecified number of smart meters and over one million ‘dumb’ meters.

It was an operator of gas metering services for parts of British Gas for several years, for example.

An estimated 33,000 large industrial and commercial meters are to be sold by Ausgrid and Endeavour, which are mostly in NSW but which span the national electricity market.

‘‘It is a legacy of the retail business,’’ said the chief executive of Networks NSW, Mr Vince Graham, which operates the Ausgrid and Endeavour businesses. ‘‘With the sale of the retail arm, we no longer have that relationship with the customer.

‘‘It is profitable, but we don’t want to invest further.’’

Mr Graham said advisors are being sought on the proposal, with a decision on whether to sell the business due by the end of the year and, if the sale is to proceed, for it to be finalised by mid-2014.

Any sale would be ‘‘in the tens of millions of dollars’’, Mr Graham said.

The original release of this article first appeared on the website of Hangzhou Night Net.

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