The state government has released a letter detailing negotiations with Alinta Energy before the closure of the Northern Power Station.
The letter was released after pressure from a Freedom of Information request by state Member for Stuart Dan van Holst Pellekaan which was scheduled to head for court proceedings.
It was sent by Alinta Energy CEO Jeff Dimery on January 22, 2015, to state Treasurer Tom Koutsantonis, five months before the closure of the Northern Power Station.
Mr Dimery wrote that despite Alinta’s previous investments of $150 million since taking ownership in March 2011, the Wholesale Electricity Market in South Australia had ‘deteriorated’.
Mr Dimery requested the state government reconsider making capital investments into the Port Augusta based power station.
“A revision of these arrangements reflecting the marginal nature of the Flinders assets, and the long term certainty such a revision ... will better place Alinta Energy to continue to invest capital in the Flinders asset,” he wrote.
“(And) to invest further in retail competition four South Australian households and businesses...”
And according to Mr Dimery, this assistance could’ve helped extend the life of the Leigh Creek Coal Mine and secure energy generation at the Northern Power Station until 2028.
The government rejected this approach and Treasurer Koutsantonis provided the following statement.
“It was always the preference of the state government that commercial discussions pertaining to the future of the company remain private,” Mr Koutsantonis said.
“However the Government does not wish to spend taxpayers money fighting the release of this letter in court.”
Mr Koutsantonis said that in regards to the details of the letter, ultimately, the government took the decision not to offer capacity payments for a privately-owned generator to operate.
He said if they did, there would not be anything stopping every generator in the state demanding the same thing.
“If the government had agreed to a deal with Alinta at the time, then of course the government would have released all those details publicly.”
State Shadow Minister for Energy and Resources Dan van Holst Pellekaan called the state government’s actions ‘disgraceful’ game playing with the issue..
“(It) is shamefully disrespectful to our community which wants employment and a sensible transition to renewable energy,” he said.
“...The government has delivered a doubling in electricity prices since May, increased unemployment, an extended blackout and an impeded path to solar thermal in Port Augusta..”