After many years of secret negotiations between Clarence Valley Council (CVC) and Essential Energy (EE), Coffs Harbour City Council (CHCC) and CVC will each hold a 50 per cent share of “the disused Nymboida Hydro Power Scheme and associated water licences” once the deal is settled.
In June 2019, EE demanded the signing of a ‘comprehensive confidentiality agreement’, following CVC’s June 2018 decision to invest $40,000 in a desktop study (it cost $35,400), with the preferred outcome of CVC “owning and operating the hydro scheme, for the generation of power … for local government use, with any surplus supply being sold to the grid”.
Come October 2019, the confidential desktop study was considered and councillors – all of whom, apart from Cr Greg Clancy, supported Cr Richie’ Williamson’s June 2018 notice of motion – decided to “hold discussions with EE … to gain agreement on options for the future ownership transfer and/or potential joint venture opportunities”.
That decision bound CVC to potentially spend $100,000 on “expert consultants and solicitors to facilitate negotiations”, $80,000 on “consultants to undertake a detailed feasibility study” and $300,000 on “consultants to complete the engineering design and construction management”.
However, the fine print regarding what CVC has spent so far and future capital costs and running expenses will remain confidential until the sale is settled.
Clarence Valley Council’s general manager, Ashley Lindsay, said purchasing “the major infrastructure asset secured the Clarence Valley’s future water supply”.
“It … means we can explore options to use the assets in ways that better help our community and support our overall water supply strategy,” he said.
However, it seems that recommissioning the hydro infrastructure to generate electricity is unlikely to proceed.
“The hydro power station is not operational,” Mr Lindsay said, “and if council was going to pursue the hydro scheme at all, we’d have to construct something; I don’t think it’s possible for [CVC] to re-establish the existing facility.”
He said that EE “wanted to get out of all their infrastructure at the site – EE is a poles and wires organisation, not an energy retailer”.
“The deal was ‘take the lot’,” he said.
Does that mean recommissioning the hydro infrastructure is ruled out?
“That’s a “decision for a new council,” Mr Lindsay said. “It’s something they, potentially, could explore.
Mr Lindsay clarified the ownership breakdown, given that CHCC was not party to the confidential agreement between CVC and EE.
“The actual land and infrastructure are purchased by the CVC, in name, but Coffs Harbour, by their regional water supply agreement [with CVC], will contribute 50 per cent,” he said.
Mr Lindsay said CVC met with EE yesterday (after the paper’s editorial deadline) to discuss a minor subdivision, to accommodate EE’s existing substation, and whatever else needs to be done to “achieve settlement”, including the lodgement of a development application (DA) for the substation subdivision.
Mr Lindsay said the settlement period was “lengthy” and that the “water licences haven’t been transferred yet”, so he was unable to provide an estimated finalisation date.
“Just so we are clear on the value of the purchase,” he said, “the whole process has been reviewed by NSW Treasury and they’ve given their okay.”
Mr Lindsay said CVC’s share of the purchase price would be covered by its water fund.
Will ratepayers have to pay more for their water as a result of this deal?
“No, they shouldn’t,” Mr Lindsay said.
Meanwhile, all references to the Nymboida power and water decisions made by councillors over past years were removed from CVC’s ‘Council Meeting Checklist – Update on Actions Taken’, following the July 2021 CVC meeting, including the investigation of recommissioning the hydro station.
When asked why the items were removed, Mr Lindsay said, “It’ll become clear when the confidential resolution form the July extraordinary meeting is made [public]; it’ll become clear then.”
Mr Lindsay confirmed that the purchase also meant that CVC was now responsible for the construction of a fish ladder at the site – in the original contract with CVC (expired in 2008) EE was bound to construct the fish ladder.
In 2015, EE’s general manager (asset management), Brian Green, told the Independent that “studies to find a suitable ladder … tailored to the seasonal flows and the combination of fish species in the Nymboida River … are ongoing”.
Using “typical designs of fish ladders installed along the Murray River by the NSW Department of Public Works” as an example, Mr Green said the estimated cost to construct the ladder was “between $1.5 million and $2.5 million, with varying degrees of effectiveness”.
At that time, Mr Green said the fish ladder was being considered “independent of the recently signed Heads of Agreement” with CVC and that “discussions between EE, the Department of Primary Industries and CVC” were continuing.
However, that no longer applies; Mr Lindsay said constructing “the fish ladder is still a requirement that needs to be dealt with; we are taking over any outstanding responsibilities”.
Meanwhile, EE’s executive manager of engineering, Luke Jenner, said in a media release that EE is “really pleased to have reached this positive outcome with CVC; it’s a positive outcome for all involved.”
Coffs Harbour City Council’s general manager, Steve McGrath, said the deal was an “essential step in concluding security for the Coffs Harbour City and CVC water supplies”.
“CHCC look forward to working with CVC to formalise the governance arrangements around the regional water supply scheme, through the appropriate treatment and recognition of the applicable water supply assets involved in the Nymboida power station and licences,” he said in the media release.
“External consultants were engaged to provide independent valuations and inform a mutually reasonable price,” the media release stated.