The NSW government's planned lease for poles and wires would hand over majority control of the Illawarra's electricity supply to an as-yet-unknown entity.
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The successful bidder would hold the majority share of 50.4 per cent in Endeavour Energy, which supplies power to homes and businesses in the Illawarra.
Though the Baird government has emphasised that the state will retain 51 per cent ownership, that figure is for the state's network as a whole.
Essential Energy, which services rural and regional NSW, will remain entirely publicly owned, 50.4 per cent of both Endeavour and Ausgrid (which services Sydney and the Hunter) will be privatised, and 100 per cent of high-voltage supplier Transgrid is on the auction block.
One University of Wollongong academic says the government has been "deceitful" in claiming 51 per cent of the state's poles and wires will remain in public hands.
However, the head of the university's SMART Infrastructure Facility said there was nothing to fear in "asset recycling" and the leasing would result in people saving hundreds of dollars on their electricity bills.
UOW honorary professor Sharon Beder said the government was deliberately focusing on the 51 per cent figure, even though they were giving away majority holdings on each of the leased networks.
"That's no accident, they're purposely deceiving the public," said Prof Beder, who wrote the book Power Play: The Fight for Control of the World's Electricity.
"In their media statements they're announcing they're only selling off 49 per cent. It's to give people the impression the government will still have majority control when in fact they're selling majority control in the cases where they are selling off the companies."
In return for leasing the three networks, the government has promised that the expected $20-billion sale price will be spent on infrastructure. More than half of the $550 million promised this week for the Albion Park Rail bypass will come from this $20-billion pool.
To alleviate concerns about rising electricity bills, the government has built in a 1 per cent discount on network electricity costs until 2019.
It has also pointed to Victoria and South Australia, where electricity has been privatised and bills are lower than in NSW.
An Ernst and Young report commissioned by NSW Treasury says electricity prices in NSW between 1996 and 2013 rose by 122 per cent, but they fell by 18 per cent in Victoria and 17 per cent in South Australia.
But that same report also points out that NSW had heavily invested in infrastructure, which is a factor in rising costs, while the networks in Victoria and South Australia will require substantial investment in the near future.
Prof Beder said the government's comparison of NSW with Victoria also wasn't fair because of the states' different sizes.
"In a state like NSW where you have a larger network, a greater area to cover, it's going to cost more to build and maintain," she said.
"[Also] the price can't be looked at without seeing what you get in terms of reliability, maintenance.
"What private companies tend to do is cut back on the maintenance staff, they don't replace equipment in advance, they wait till it fails. So you get problems with reliability."
The government is on record as saying the leasing will "put downward pressure on electricity prices" and has pointed to the draft decision by the Australian Energy Regulator (AER) as further evidence of falling prices.
The AER sets the prices electricity networks can charge. In November, it released a draft determination on price well below that requested by Endeavour and Ausgrid.
But Prof Beder said the government's price promise was easy to make because no further investment - the cost of which is ultimately borne by the consumer - will be needed for the short term.
"The government can guarantee prices won't go up in the short term because all the investment's already been made in the last few years," she said.
"But we're going to be stuck with private owners for the next 99 years.
"What happens then when new infrastructure is needed? The prices will go up."
Prof Beder foresees a lot of cuts once a private sector consortium takes over - because it's a way of reducing costs. The benefit of those cuts - which would include staff cuts - won't show up in reduced electricity bills. Rather, they'll end up in shareholders' pockets.
"Private owners will do that [cut back] anyway - they're out to maximise profits and dividends, whatever the pricing formula is," she said.
"They'll be looking at public infrastructure and thinking 'we can cut back on this and we can cut back on that'. Staff is one of the obvious areas they can cut back. They don't have to worry about blackouts and power failures in the same way a government has to worry about it."
Garry Bowditch, chief executive of the SMART Infrastructure Facility (it has been hired by Transport NSW to benchmark infrastructure costs), said asset recycling - what the government was attempting with the poles and wires lease - was not anything "exotic or new".
"It's just part of competent public and private administration, " Mr Bowditch said.
"We shouldn't see it as something that is unusual. It should be a very standard procedure to ensure that all assets, whether at a university or government, are all working as best they can to provide the right services that people expect."
On Wednesday SMART Infrastructure released a paper that looked at both the proposed electricity lease and where the expected revenue was to be spent.
It also looked at other ways to raise the amount of money required to develop infrastructure and found them to be "not viable or possible".
"If the government is to live up to the expectations of the community and that is to continue to provide infrastructure of a high quality as soon as possible, then this is the only sensible course available to the government in the current economic context," Mr Bowditch said.
Rather than being concerned about the government holding less than half of Endeavour Energy, Mr Bowditch believed people's focus should be on how much they were paying for electricity.
"Injecting a greater private sector provision will result in greater discipline in the capital expenditure, which will flow directly into lower bills into the future," he said.
Mr Bowditch couldn't say exactly when consumers would see their bills fall but he expected a substantial drop.
"The reduction in power bills should not be insignificant and it should be measured in hundreds of dollars as opposed to tens of dollars for an average consumer over the course of the year," he said.
