NSW Government to sell power stations for $700m to raise funds for infrastructure projects The NSW Government is looking to sell its remaining power stations, as well as its wind farms and hydro-electricity assets, even as key issues such as a carbon price and the ability of state governments to retain tax streams remain in the air. The NSW Treasurer Mike Baird announced that Vales Point and Colongra power stations would be sold, with the government hoping to receive more than $700 million. Vales Point is a 1320 MW power station on the NSW Central Coast which has a demonstration scale carbon capture and storage project jointly run with the CSIRO. Colongra is a modern gas-fired station which supplies power during peak load times, such as hot summer days and cold winter nights. Together the two plants produce about four per cent of the national electricity market. According to its last annual report, Delta Energy, which currently owns the two power stations, paid $400 million in carbon tax last year for all its power stations, some of which have since been sold. Depending on by how much the cost of electricity drops after the carbon tax repeal, the value of the power stations could significantly increase. Its statement of corporate intent previewed losses after this financial year. Delta's negative retained earnings, a legacy of the Gentrader sale, would prevent dividends being paid from normal operations in 2013/14. Its annual report forecast flat demand for electricity in NSW, noting that maximum demand had fallen dramatically in recent years and was now back to the levels of ten years ago. As well, the NSW government is waiting for the federal government to sign-off on a proposal for the states to be able to keep the tax revenue which they get from their publicly-owned corporations when they are privatised. Depending on the timing of the sale of these and other power stations and whether the measure is made retrospective, the NSW government could be benefit by hundreds of millions of dollars. Currently, when state owned corporations are privatised the state government loses its tax equivalent payments, which then go to the federal government. This makes privatisation significantly less attractive for state governments. The NSW government has also put up for sale its collection of renewable energy assets, which produce 105 MW, hoping to get up at least $50 million. These include Hume, Burrinjuck and Keepit hydro generators, the Blayney wind farm, an interest in the Crookwell wind farm, and 1,634 hectares of Mallee trees registered for carbon storage. The Government has already sold Eraring Energy power stations and Delta Energy's generators west of the dividing range, at the same time unwinding the "Gentrader" contractors struck by the previous Labor government in which the state retained ownership but sold the output of the stations under long-term contracts. It is also in the process of selling Macquarie Generation, which runs Hunter valley power stations. It is likely that Vales Point and Colongra will not be sold until after Macquarie Generation sale process is completed, to allow unsuccessful bidders a second chance to buy generation capacity. The sale proceeds are earmarked to finance the government infrastructure agenda, including its North West rail link and WestConnex motorway. Mr Baird said the proceeds from the sale would be invested in the NSW Government's infrastructure fund, Restart NSW, with 30 per cent of funds reserved for projects in regional areas.