Publishers Note: The NSW Govt gave Delta Electricity $556M to keep Vales Point coal fired power station runnning. It has now sold it for $1M to coal billionaires. By doing so it claws back some of the half a billion dollars it spent the station. But who will pay for its future De-commissioning? The article appears below.]
The NSW government has sold its last coal-fired power station to two of Australia’s richest men for just $1 million, the price of an average Sydney house.
The Baird government had previously failed to sell Vales Point, a 50-year-old power plant on the shores of Lake Macquarie on the NSW central coast.
Given excess capacity, the plant’s future looked bleak, but the government has sold Vales Point for a nominal $1m to interests associated with Trevor St Baker, the founder of energy retailer ERM Power and operator of gas-fired power plants, and coal baron Brian Flannery.
Mr Flannery, whose wealth is estimated by BRW at $817m, is a co-founder of White Energy and was a bit player in the Independent Commission Against Corruption’s investigation into former Labor powerbroker Eddie Obeid and the coal lease over his Hunter region family farm. Mr Flannery was not found to be corrupt.
Under the deal, $130m will be returned to the government that had been earmarked for capital expenditure. The government was forced to inject $556m into Vale Point’s operator, Delta Electricity, last year because of ongoing losses. This pay-back represents the majority of the money it received for selling power stations owned by Delta Energy, apparently because it left the company with massive debts and little assets.
Delta Energy received $220m for the sale of its Colongra power station, and $456m from its sale of Mount Piper and Wallerawang power plants.
NSW Treasurer Gladys Berejiklian said by selling Vales Point, NSW was no longer exposed to liabilities, such as with decommissioning costs, estimated to be in the tens of millions. The deal does mean the government is liable for the remediation of the site or at least for environmental damage, when the plant is closed.
The new owners have agreed to take on the employee entitlements for four years, and their superannuation liabilities. With coal contracts until 2022, it suggests they will continue to operate the plant.