Consumers to benefit from Qld energy reforms

New reforms to Queensland’s energy generators will reap savings to assist Queenslanders combat higher energy prices, Treasurer Andrew Fraser said.

The $60 million in savings from streamlining the three generators into two will be used to expand and extend the Climate Smart Home Service to benefit Queensland households.

After a review of the State Government-owned electricity generators (Gencos), CS Energy, Stanwell and Tarong Energy will today begin consultation with employees and unions around the Government’s plan to restructure its three Gencos into two from 1 July 2011.

The review announced in December 2008 examined the performance of the generator companies, including the potential impact of future carbon pricing policies, and will not involve any job losses for power station employees.

Mr Fraser said this process was about strengthening the State’s generation fleet, and completely ruled out any sale of the assets.

“The only political party in Queensland who has publicly stated its desire to sell Queensland’s electricity generators is the Liberal National Party*,” Mr Fraser said.

*LNP Shadow Treasurer Tim Nicholls, Hansard, 30 November 2006

It is important to give credit to the government for at last accepting the benefits of privatisation, but this government’s effort is half-hearted at best. One has to ask: why not sell the poles and wires as well? Why not sell the generators as well? Most informed commentators know that this is the best solution to provide adequate power efficiently and with little risk to government.

“Conversely, this review is about finding the best way to maximise the use of the existing plant resources and secure their financial future.

“Each of the Gencos 2009-10 Annual Reports highlight the challenging market conditions faced and the resultant impact on the Gencos’ financial viability now and into the future.

“By undertaking a corporate restructure, we will achieve reduced corporate overheads, better plant utilisation, maintenance synergies and improved asset management.

“This will secure the jobs of the Genco employees – ensuring they are part of strong companies well placed to compete in the National Electricity Market.

Mr Fraser said the restructure would impact on some executive and corporate office positions, but it won't affect the operational workforce and there will be no forced redundancies for award or agreement covered staff.

"This is the first step of the process. The Government will ensure that the companies now consult fully with unions and staff throughout.”

Mr Fraser said the dynamic nature of the energy sector meant Genco reform was a must.

"The current three-generator structure was implemented in 1997,” Mr Fraser said.

“Private sector investment in generators such as Braemar, Darling Downs and Millmerran has changed the dynamic of the sector.

“The energy sector is changing, and we must change with it in order to maintain our competitiveness.”

Mr Fraser said the restructure would have no impact on electricity prices.

“This reform is about finding better, more efficient ways to run these businesses.

“This reform will have nothing to do with the price of electricity paid for by consumers.”

Mr Fraser said the Government was committed to consulting with unions and expected their support.

“In past reviews, the ETU has strongly supported a two-genco structure – it knows this strengthens the future of the Government owned generator fleet.

“This is good news for the workforce associated with the generator fleet.”

Current and restructured Genco portfolios – Australian Energy Market Operator registered capacities