Carr goes via the backdoor on electricity privatisation

This may entail existing government retailers continuing to bill customers, with behind-the-scenes wholesaling done by the likes of AGL and Origin. A more radical option would be to sell the whole shebang - billing, marketing and contract management. Bob Carr could rightly argue this isn’t privatisation, as no crucial supply assets would be lost to public ownership and retail is essentially “white-collar”.

The other important variable in the retail solution is “safety net” tariffs for households.

State governments won’t relinquish control of retail price fixing - it has been the major sticking point in the transition to national regulation.

NSW and Queensland face two key difficulties with regulated tariffs for franchised small users like you and me. First, they are generally below cost. Both governments have been slowly ramping prices up in the hope that customers will jump into the market and negotiate commercial terms - if and when they are allowed to.

The second problem is cultural. Unlike Victoria, which had no alternative to radical reform because of its previous budget situation, much of the NSW and Queensland public still see electricity as an essential service necessitating direct government involvement. Even where regulated prices exceed market, people will remain on tariff because their prices are set by someone they can trust - or at least, mistrust less.

A possible solution for Premier Carr would be to staple the rights to serve remaining franchise customers to any sale of existing retail activities. That is, a swag of NSW customers could be handed over to a private retailer, on the proviso that they continue to receive electricity at an agreed price for a certain period.

By facilitating long-awaited consolidation of retail, NSW will cause a major policy headache for Peter Beattie.

His two government-owned retailers don’t have the scale to compete with aggressive private operators with customers stretching from Tweed Heads to Port Lincoln. Energex and Ergon must pose the question: do we grow to match AGL and Origin, retreat to “boutique” retailer status or wither on the vine?

There is precious little time left for half-measures. If its electricity retailers and generators are disallowed - by the owners or NSW government - from participating in the upcoming NSW opportunities, Queensland will be left with an uncommercial industry structure that will only place further pressure on policies such as continued tariff support and public ownership.

Many have been waiting for Bob Carr to let go of the NSW electricity industry so a truly national market can develop in terms of both commercial reach and regulatory consistency. The Energy White Paper due out in April promises a big step in the right direction.