A committee of the News South Wales State Parliament recommends the Australia national government acquire full ownership of the 3,756-MW Snowy Mountains hydroelectric scheme from its partner owners New South Wales (NSW) and Victoria states.
The Legislative Council’s Select Committee on the Continued Public Ownership of Snowy Hydro Ltd. issued the findings October 26. The panel was convened after public anger last June caused the governments to cancel a A$1.7 billion (US$1.3 billion) privatization sale of the scheme’s operator Snowy Hydro Ltd. (HNN 6/5/06)
ï¿½The committee acknowledges that Snowy Hydro needs to expand in the National Electricity Market (NEM) due to the company’s critical role in this market and the recent market trend of vertical integration,ï¿½ the report said. ï¿½… The committee acknowledges that Snowy Hydro needs to pursue a high growth strategy and that additional capital of approximately A$800 million (US$606 million) is required.ï¿½
At the same time, the report said, it is clear the shareholding governments — NSW and Victoria — are not in favor of investing additional funds in the project at the expense of government services. It added the public outcry for keeping the hydro scheme in public ownership appeared to rule out privatization as a source of capital.
ï¿½The committee recommends that the NSW government pursue the position jointly taken with the Victorian government: that the Commonwealth acquire Snowy Hydro Ltd. and that any acquisition must guarantee the retention of existing water entitlements and the public ownership of the corporation,ï¿½ Chairman Gordon Moyes said.
The panel also recommended the Snowy Scientific Committee, authorized by the Snowy Corporatization Act of 1997, be established immediately to monitor the effect of the hydro scheme on environmental water flows in the fragile Snowy River. The panel also recommended that owner governments do a better job of informing the public of their plans in future.
ï¿½While some people may never have supported the sale of Snowy Hydro, no matter how much information they were provided, the committee considers that, if more information had been provided to the community prior to and during the proposed sale, the debate would have been better informed,ï¿½ the report said.
Australia Prime Minister John Howard bowed to public anger June 2 and withdrew his government’s 13 percent stake from the privatization sale. That prompted the two state governments holding the rest of the shares also to cancel. New South Wales state, which owns 58 percent of Snowy Hydro, had pushed for the sale to release funds for public spending.
Snowy Hydro owns and operates the 3,756-MW Snowy Mountains Hydroelectric Scheme, which consists of seven power stations and 16 major dams. It provides 74 percent of the renewable energy in the mainland power market. The project took 25 years to build, and reversed the flow of the Snowy River, channeling the water through 225 kilometers of tunnels and aqueducts.