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Category: Electricity Energy and Utilities / States and Territories / Government and Politics

'It's not free': Port Augusta power station giveaway 'a bad deal'

04:03 UTC+8 March 30, 2017 | Tom Fedorowytsch

Final day of coal power generation at Port Augusta "bittersweet" for region. (Supplied: Peter Taylor)

It has been revealed that Alinta Energy offered to give away the Port Augusta coal-fired power station for free.

The company approached the South Australian Government to take ownership of the plant under a "walk-in, walk-out" basis during negotiations in 2015, where it had also sought $25 million in subsidies to keep it running until 2018.

Alinta's offer is referred to in a letter from chief executive officer Jeff Dimery in 2015, obtained by the ABC.

Last year, the plant closed following the 2014 end to coal mining at Leigh Creek, both with the loss of hundreds of jobs.

SA Energy Minister Tom Koutsantonis said despite the apparent free deal, the Government would have taken on huge costs.

Coal train in the outback landscape Photo: Coal was transported to the power station via train. (ABC News: Khama Reid)

"Alinta would have walked away without having to pay any of the money for the clean-up of the mess that they had incurred and legacy liability they had taken on which is worth hundreds of millions of dollars," he said.

"So it's not free, it's actually hundreds of millions of dollars."

He said the price of taking on the plant's liabilities would not have cancelled out the impacts of job losses or the cutback of thermal, baseload power.

"We would be getting a coal mine that had no coal, to run a power station that was losing hundreds of millions of dollars," he said.

"It was a bad deal for the taxpayers and we said 'no'."

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South Australian taxpayers once owned the plant, but it changed hands several times after privatisation in 1999.

Mr Koutsantonis said the circumstances would have been different had it stayed in public hands all along.

"We would have been investing in it while we owned it, we would not have been losing hundreds of millions of dollars, and we would have been running it in the interests of South Australian taxpayers," he said.

"If you take one part of the market back into government hands you have to take all of it, because when we ran ETSA, there wasn't a national electricity market and we weren't competing in a retail sense with anyone."

External Link: Alinta energy letter

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