Last October then Premier Mike Baird announced that Australian Super and IFM investors would pay $16.189 billion for 50.4 per cent of Ausgrid on a 99-year lease after an unsolicited proposal to the NSW government.

The proposal was first revealed in late September, shortly after Chinese bids for the original tender were blocked on national security grounds by federal Treasurer Scott Morrison.

The unsolicited proposal rules allow for a confidential approach to the NSW government with a unique proposition that, if accepted, does not need to go to tender.

The process was controversially used by businessman James Packer to secure a Sydney casino licence at Barangaroo.

At the time of the Ausgrid announcement Mr Baird said the unique aspect of the bid was "the 100 per cent Australian ownership".

But Opposition Leader Luke Foley, who went to the 2015 state election opposing electricity privatisation, wrote to NSW Auditor-General Margaret Crawford asking her to examine the process.

Mr Foley said the Ausgrid privatisation "represented a cynical misuse of the unsolicited proposals process".

He argued the bid failed to comply with a guideline that the process "further engage with the private sector in the development and delivery of new infrastructure and services".

"The privatisation of Ausgrid did not involve any new infrastructure," Mr Foley wrote.

He also attacked Mr Baird's claim the bid was unique.

"This claim was pernicious and preposterous," he wrote, noting the firms manage $131 billion worth of assets between them, which is "a sliver" of the $2 trillion in all Australian super funds.

This meant that "the claimed uniqueness is nonsensical and there were many other Australian buyers available to compete for the asset".

Mr Foley said the lack of competitive tension in the Ausgrid sale "represents a substantial and thoroughly avoidable loss for NSW taxpayers".

Ms Crawford responded that she has decided to "undertake a performance audit on the unsolicited proposals process that resulted in the long-term lease of 50.4 per cent of Ausgrid".

Ms Crawford expected the audit to start during the 2017-18 financial year.

A spokesman for the Department of Premier and Cabinet said the auditor general routinely undertakes such performance audits.

He said the bid was "thoroughly assessed" by the government's unsolicited proposals steering committee.

"The proposal was evaluated according to the NSW government's unsolicited proposals guidelines, and found to both meet the uniqueness criterion as well as being value for money for NSW citizens," the spokesman said.