During the 1990s, the electricity industry in NSW experienced three major and inter-related changes: corporatisation, disaggregation and marketisation. The NSW electricity industry was subject to radical restructuring throughout the decade, but without complete privatisation. Corporatisation involved a disengagement of the state from the management of public utilities while maintaining govemment ownership. The corporatised entities became subject to greater commercial expectations and stronger market competition, they were required to retum a dividend to their owners and their managements were expected to operate in a manner more similar to that in the private sector. And yet, at the same time, these corporations continued to be subject to government direction in certain areas of decision-making, including aspects of employment and industrial relations. This contradictory situation-inherent to corporatised, as opposed to privatised, utilities-is a central theme of this chapter. By focusing mostly on two of the new corporations in the generation sector of the industry over the period between 1996 and 1999, it will be shown that corporatisation, which is in many ways a half-way house befween traditional state ownership and privatisation, presents real dilemmas for all the main players.