NSW's infrastructure drive is back on track with the competition tribunal backing a bid from energy giant AGL to buy two state-owned power stations.
The Australian Competition Tribunal (ACT) on Wednesday ruled in favour of AGL's purchase of Macquarie Generation, which owns the Bayswater and Liddell power stations.
In its ruling, the tribunal said the acquisition of the Macquarie Generation's assets by AGL may now be completed by June 24, 2015.
AGL took the case to the tribunal after the Australian Competition and Consumer Commission (ACCC) in March rejected the proposed sale, saying it would "substantially" lessen competition in the electricity market.
The Baird government says the sale will add about $700 million to the state's coffers, which will go towards infrastructure projects.
The ACCC was concerned the acquisition would mean up to 80 per cent of the state's energy generation would be controlled by three companies: AGL, Origin and EnergyAustralia.
The competition watchdog argued that would risk damaging competition in the sector by raising barriers to entry and expansion for other electricity retailers.
But the tribunal ruled on Wednesday that it was satisfied the proposed sale would likely result in "substantial public benefits" and that the public detriments identified by the ACCC were "unlikely to arise".
The tribunal was satisfied that after the sale there would be "active competition" in the NSW retail market, including by small retailers that would have a "substantial and adequate hedge market available to them".
The tribunal's decision effectively overturns the ACCC's original ruling against the $1.5 billion sale.
ACCC chairman Rod Sims said the disappointing decision would have "significant implications" for competition in the retail and wholesale electricity markets.
"The ACCC remains of the view that privatisation of these assets to an alternative bidder would achieve a more competitive outcome which in turn will benefit NSW consumers," he said in a statement.
NSW Treasurer Andrew Constance said the government had always said it would only proceed with the sale if it was in the best interests of the community.
"The Australian Competition Tribunal has today confirmed that view," Mr Constance said in a statement.
He stressed the sale would free up more money for "critical infrastructure" across NSW.
AGL managing director Michael Fraser said the decision vindicated the company's view.
AGL says the ACCC now has "limited grounds" for appealing the decision within 28 days.
NSW Opposition Leader John Robertson said the ACCC had made the right call in attempting to block the sale.
"It's worrying that this company has been able to get around the competition regulator despite their warnings," the Labor leader told AAP in a statement.
"The only loser out of this deal will be families who will now be faced with increased power prices."
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