First published October 1, 2014.
Clarence Valley Council’s secret water deal
Geoff Helisma
When the state government, Essential Energy (EE) and Clarence Valley Council make a decision on the future of the Nymboida hydroelectric power station they will also be deciding how the valley’s water supply will be managed – but the valley’s ratepayers may not be told of the outcome.
The council has a “commercial in confidence” agreement with Essential Energy, which holds the valley’s water supply licence.
The Clarence Valley Review (now known as the Clarence Valley Independent) has information that indicates that Essential Energy may have either been supplying water free of charge or heavily subsidising the valley’s water supply bill, however, none of the entities were prepared to release any details of the arrangement.
The Review put a series of questions to the three organisations, seeking information about the agreement.
“Given both of the entities are ‘owned’ by the people of NSW and the Clarence Valley, why is this information not freely available?” the Review asked.
“With a decision soon to be made in relation to the future of the hydro station at Nymboida and Essential Energy’s ‘ownership’ of the water it sells to the council, it appears that this could result in an increase in the cost to the valley’s ratepayers for that water, dependent on the decision made by the ‘whole of government’ initiative.
“What are the scenarios being considered regarding the supply of this water?
“Is it true that EE has been subsidising the cost of water supplied to CVC?
“What is the percentage/value of this subsidisation?
“Is it true that the council was not paying EE for water at all until after 2008 (or at any time prior to or after this) because it was unmetered?
“What proportion of the water does the council pay for now?
“At what cost?
“If a decision is made by EE to divest itself of the water infrastructure (eg State Water (Bulk Water NSW) takes over its admin and ownership) or lease it to a third party, what decisions would need to be made by the council, EE and the state government?”
Clarence Valley Council responded with the following statement: “Clarence Valley Council works and civil director, Troy Anderson, said Essential Energy was a government-owned corporation, but acted in the same manner as any business in the commercial world.
“He said the council had a number of commercial in confidence agreements with businesses, and this was no different.
“He said the licence to extract water was held by Essential Energy because it owned the extraction point, and under NSW regulations whoever owned the extraction point needed to hold the water licence.
“He said if Essential Energy withdrew from the Nymboida Power Station, the council would consider applying to the NSW Government to become the licence holder.”
Essential Energy responded with a statement, too: “Essential Energy has worked closely with Clarence Valley Council since 1924 when the Nymboida Hydro-Electric Power Station was constructed and the infrastructure for the town water supply and the power station became integrated, providing water for both purposes.
“Essential Energy has a Commercial In Confidence agreement with Clarence Valley Council regarding arrangements that permit water supply for the cities of Grafton and Coffs Harbour.
“Essential Energy met with relevant State Government ministers and Member for Clarence, Chris Gulaptis, in Sydney recently to discuss the future of Nymboida Hydro-Electric Power Station and downstream water flows.
“The meeting was constructive and Essential Energy will continue to work with government agencies to explore the economic and operational viability of a range of options for the future Nymboida hydro-electricity generation plant operations and water supply.”
Clarence MP Chris Gulaptis, who would not reveal any detail of the agreement, said the main issue, regarding the hydro station’s future, “is to consider the options of fully refurbishing it to a functioning hydro power plant: that is the priority”.
“In among that, the return on the investment [if it is refurbished] will be considered, and whether there are any opportunities to obtain green credits, as it would almost be a total reconstruction.
Mr Gulaptis said “this investigation will determine where we go to next”.
“The council is the authority responsible for water reticulation in the Clarence Valley – any issues that involve the state government, I will consider those then.
“The key focus is to return the facility to a fully functioning plant: that is the message I left with the minister.”
The mayor, Richie Williamson, was not invited to the recent meeting in Sydney.
He said he did not expect to be invited, as it was a state government issue.
Clarence Valley Council unanimously supported Mr Williamson’s mayoral minute at the November 2013 council meeting.
Councillors resolved to “write to Essential Energy and the New South Wales Minster for Energy … registering the Council’s strong objection to any proposed closure of the Nymboida Hydro-Electric Power Station”; and to “write to Essential Energy seeking an urgent review takes place regarding the environmental flows into Goolang Creek”.