The Federal Government must withdraw its $8.7 million grant to Vales Point power station after revelations that owners Trevor St Baker and Brian Flannery took $62 million in dividends in FY2019-20.
Details of the superprofit are contained in Financial Statements and Reports posted with the Australian Securities & Investments Commission for Delta Electricity and subsidiary Sunset Power International.
"Other coal power station owners have refurbished their turbines with their own money — only Trevor St Baker's company is seeking government handouts to refurbish its coal-fired power station,” Nature Conservation Council Campaigns Director Brad Smith said.
"Voters must be wondering why Angus Taylor is providing taxpayer handouts to wealthy coal barons like these.
"It's outrageous that Sunset Power International made a $141 million profit while seeking a taxpayer handout of $8.7 million to maintain their aging power station.
“This deal is not only bad for taxpayers, it is bad for the climate.
“Every three months the turbine refurbishment adds to the life of the power station will cause one million additional tonnes of climate pollution.
"It's clear that this is a terrible waste of taxpayers’ money and Angus Taylor must not award this grant."
The financial statement reports the value of the Vales Point, which Mr St Baker bought from the NSW Government for a bargain $1 million, was written down by $113 million due to increased competition from solar and wind generation.
Mr St Baker last week reportedly threatened to sue the NSW Government for damages if it implemented its clean energy package.
The package aims to increase renewable generation in NSW by 12 GW by 2030..
"It's now clear that Trevor St Baker's attempt to scupper the NSW Electricity Infrastructure Investment Roadmap was based on self-interest and against the interests of NSW consumers,” Nature Conservation Council Campaigns Director Brad Smith said.
Mr St Baker has made $198,050 in political donations over the past three years.
AUSTRALIAN FINANCIAL REVIEW
Power barons pocket $62m, slash Vales Point value
Dec 1, 2020 – 12.01am
Power barons Trevor St Baker and Brian Flannery have slashed the value of the Vales Point power station by almost half despite posting a profit and pocketing a $62 million dividend from the NSW coal plant they bought for $1 million from the state government
Mr St Baker has also agreed to buy out Mr Flannery's 50 per cent share of the NSW coal power station near Lake Macquarie – which supplies about 4 per cent of power for the national grid.
The company – in which the duo are the only shareholders – slashed the value of the plant by 45 per cent to $221.7 million, down from $408.8 million last year, documents lodged by Sunset Power International with the corporate regulator showed.
The hefty write-down comes just five years after the duo paid the NSW government only $1 million for the facility on the state’s Central Coast in 2015.
The Sunset Power group blamed the pandemic-induced cut in demand for electricity and competition.
"Electricity prices and Vales Point production remained high in the first half of the financial year," Sunset Power said in its financial report.
"But reduced demand for electricity in the National Electricity Market as a result of the COVID-19 pandemic, combined with an increase in the supply of renewable electricity, has resulted in lower electricity prices and reduced production at Vales Point Power station.
"As a result of realised value during the financial year and the lower forward electricity market price curve for electricity, the fair value of Vales Point Power station has been lowered."
This comes as Mr St Baker criticised the landmark NSW renewable energy road map, which passed Parliament last Friday and aims to attract $32 billion of private investment in NSW infrastructure to build 12GW of renewable energy and 2GW of storage.
The road map – backed by the Australian Energy Market Operator – drew the ire of the federal government and industry but won cross-party support in Parliament despite 30 hours of obstructions by One Nation's Mark Latham, who referenced Mr St Baker's criticism that it would devalue coal-fired power plants.
The Vales Point power station near Lake Macquarie is a bit more than half the size of the Loy Yang A brown coal-fired plant, Australia's largest, in Victoria's La Trobe Valley and about the same as the Yallourn Power Station.
The 1320-megawatt plant – the backdrop for the film clip of the Midnight Oil hit US Forces – posted a 28 per cent net profit increase to $134.7 million from $535.1 million revenue. In the previous year it earned $96 million profit from $598.9 million revenue.
An annual dividend of $62 million was paid, compared with $30 million in the previous year.
Sunset Power’s balance sheet is carrying $331 million in net assets, including $55 million in cash.
The Vales Point coal-fired power generator is controversially earmarked for $8.7 million funding in the federal budget to upgrade the power station.
Nature Conservation Council Campaigns director Dr Brad Smith called for the federal government to abandon the grant, saying the company should not pocket taxpayer funds when it has posted a profit.
"It's outrageous that Delta electricity made a $141 million profit while seeking a handout from taxpayers of $8.7 million to maintain their ageing power station," Mr Smith said.
"Other coal power station owners have refurbished their turbines from their balance sheets. Only Trevor St Baker's company is seeking government handouts to refurbish its coal-fired power station.
"Every three months that the turbine refurbishment adds to the life of the power station will cause 1 million additional tonnes of climate pollution."