Every time Ausgrid sells a surplus property it results in lower power prices for customers. This is because the sale of any property by Ausgrid reduces the amount of revenue Ausgrid charges customers as set by the regulator (the AER).
Contrary to recent reports, the sale of surplus land, whether on the open market or to Aurora Property Group, is a process specifically designed to reduce electricity prices and protect customers from financial risk.
Ausgrid is proud of the fact that we have lowered our component of customer power bills by about 8% since 2015. This has been achieved through a number of ways, including sales of surplus properties.
The sale of surplus land is not a "fire sale" for shareholder gain. It is a strategic move that boosts residential land supply in NSW, funds network projects, and most importantly strips cost out of the network to provide safer, more reliable, and more affordable power.
Every property sold to Aurora undergoes a rigorous, independent valuation process to ensure Ausgrid (and its customers) receives fair value for the asset's current state.
Ausgrid obtains valuations from two internationally recognised independent firms external to Ausgrid and the highest valuation received (in aggregate) is used to set the sale price.
Sales of land to Aurora, helps speed up savings for customers and does not expose customers to holding cost, development costs and/or adverse fluctuations in property markets.
Many of these properties need specialised works done such as the removal of electrical equipment, environmental cleanup and other remediation.
The prices cited in recent reports reflect the value of land burdened by industrial equipment and contamination, not its future potential after remediation, which can cost hundreds of thousands of dollars - it’s not fair that Ausgrid customers pay for these works.
Any eventual profits made by Aurora fund ongoing expenses or are returned as dividends. As the NSW Government owns 49.6% of both Ausgrid and Aurora, almost half of all dividends paid go directly back to the taxpayers of New South Wales.