CONCERNS about the cost of greenhouse gases to NSW power generators were underscored yesterday when the Treasurer, Michael Costa, announced changes to the electricity privatisation plans to shield taxpayers from future liability for the pollution.
The changes include a new law promising the State Government would not give an indemnity on greenhouse gas emissions to any private company wanting to lease the NSW power stations when they are privatised.
The law, part of the privitisation legislation going to Parliament today, follows the release of the Auditor-General's report last week, which highlighted a possible risk to taxpayers if privatisation of the generators went ahead before the details of the federal emissions trading scheme were known.
The federal scheme is expected to put a price on carbon emissions from power stations at about $20 a tonne but the details of the scheme are undecided and a final price is uncertain.
The Auditor-General recommended the NSW Government ensured leasing the generators was subject to "detailed analysis and review" if the federal emissions trading scheme was undecided so NSW taxpayers were not exposed.
The exposure of NSW taxpayers to risk in the privatisation is one of the issues still under debate by the Opposition as its leader, Barry O'Farrell, and his colleagues decide whether to support the Government's critical legislation today.
Opposition sources said Mr Costa's latest proposal would lower the cost of carbon emissions for generators under the privatisation plan. Electricity generators and Mr Costa have been heavily lobbying the Federal Government for either free emissions permits or large compensation for coal-fired power generators.
The Minister for Climate Change, Penny Wong, has said generators would get some form of compensation but it is expected to be far less than that being demanded by Mr Costa and generators.
Meanwhile, there was confusion yesterday about the NSW Government's first "clean coal" project under the privatisation plan. Last year the NSW Energy Minister, Ian Macdonald, backed a $5 million pilot plant to capture greenhouse gases at Munmorah power station on the Central Coast. It was to be the first phase of a $150 million clean coal project jointly funded with coalminers.
The project was an initiative of the state-owned power generator, Delta Energy, and the CSIRO. Yesterday Mr Macdonald referred questions about the clean-coal project under the privatisation to Delta Electricity and Treasury but a spokesman for Delta said the project was not covered directly in the privatisation legislation and its future would have to be worked out.
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