Power station loaded with $311m debt as smelter deal soured
STATE-OWNED power companies are bumping up electricity prices to pay down exorbitant amounts of the Queensland Government's debt according to Federal Senator Matt Canavan.
His claims come after Boyne Smelter Limited (BSL) moved to axe a "significant number" of its workers after long-running negotiations with state-owned power companies Stanwell and CS Energy broke down.
BSL turned to the corporations to bail it out of the spot market where it receives 15% of its electricity.
AS IT HAPPENED | 'Soul destroying': Workers will be axed at Boyne Smelter
The spot market price has soared from $77 a megawatt hour (MWh) in December to $12,000-$14,000 MWh in January.
But both of the power company's 2015-16 annual reports reveal the enormous pressure they are under to pay off hundreds of millions of dollars of the state's debt.
The Palaszczuk Government asked CS Energy, which owns the Callide Power Station, to pay a $13.8-million dividend, despite suffering a $23-million loss.
Stanwell Corporation, owner of the Stanwell Power Station 23km south-west of Rockhampton, was asked to pay a $311.6m dividend, up from an $89.9-million dividend in 2014-15, despite it only earning a net profit of $161m.
The report states that its net profit was up $35.7 million, and "as a result of this improved profitability and our strong balance sheet, Stanwell will pay a total dividend to shareholders of $311.6 million ... which includes a special dividend of $150 million."
Senator Canavan said the pressure to pay off the state's debt was leading the companies to bump up power prices.
"They've certainly been under pressure to find some income to pay the dividends that the Queensland Government wants off them," he said. "These job losses (at BSL) are on the back of the Queensland Government loading the companies with that debt.
"The Queensland Government should be running power stations to maximise jobs, not to pay off government debt."
He said the only way to reduce government debt without taking it out of corporations operating in regional Queensland is to downsize the public service.
"That's good for Brisbane because (the public servants) all work in that new flashy office building there," he said.
"(But) we are are struggling to keep the electricity at an affordable price.
Member for Gladstone Glenn Butcher said the debt caused a rise in power prices, but the alternative would be selling off the state's assets.
"The companies do have to pay it (the debt) off, and the cost of power is higher," Mr Butcher said.
"It's a strategy that we took on to shift around some debt to put on these good income-producing assets."