Fire sale for NSW electricity asset The fire sale of a state-owned electricity generator has headed off a billion-dollar liability that was forecast for financial failure, the NSW government says. Treasurer Mike Baird announced on Monday that the government would sell state-owned Eraring Energy to Origin Energy for a paltry $50 million. As part of the deal, the government will also pay Origin $300 million to terminate its $1.5 billion contract to build and operate a coal mine at Cobbora, in the state's central west. Taxpayers also avoided an additional $250 million that the government would have had to pay Origin for forecasted shortfalls in energy production under its existing GenTrader contract. "Today, New South Wales has dodged a fiscal bullet," Mr Baird said. The GenTrader contracts were struck in 2011 under the previous Labor government to sell electricity trading rights to the private sector. To sweeten the Origin deal, it committed taxpayers to the related Cobbora obligation, which Mr Baird described as a "dud deal." But Labor retained ownership of the power generators, including Eraring Energy. Mr Baird said the net $250 million loss from the coalition's deal struck with Origin was further reduced to $75 million after applying residual cash funnelled back to the government. "It is the right decision for the New South Wales government to exit the electricity generation sector," Mr Baird said. He expects the Eraring Energy transaction to finalise by August. The government is still moving ahead with the intended sale or lease of Cobbora once it finalises planning approvals by the end of the year. Origin Executive Director, Finance and Strategy, Karen Moses said the cancellation of the Cobbora arrangements came after it became clear "there were sufficient alternative coal supply arrangements which would deliver a better outcome for NSW and Origin." NSW Greens upper house member John Kaye supported the Cobbora exit strategy but slammed the plan to offer it to the private sector. "It's a dodgy deal," Mr Kaye said. They know they can't do it. They probably know the private sector can't do it. Power industry unions said it was absurd to sell off the enterprise, which earned more than $130 million in profits in 2012. "In addition, this company had a total asset book value of more than $1 billion, including $142 million just in land and equipment assets," Unions NSW secretary Mark Lennon said. Nature Council of NSW chief executive Pepe Clarke welcomed the decision to pull back from the Cobbora deal, saying the mine's coal was "largely of very poor quality." The government expects to sell the remaining GenTrader assets, Delta West's Mt Piper and Wallerawang power stations, to TRUenergy in coming weeks. Mr Baird said the recent decline in coal prices has generated excess supply thereby avoiding compensation payments to other GenTraders.