Snowy for Monaro or Big Business?

I don’t think there’s anything predatory about the way SnowyHydro sells electricity into the spot market – the higher prices they can command is simply a reflection of the fact that electricity available on demand is worth a lot more than electricity planned to be produced in advance.

So Wonsworld – let me get this right – you really do live in some fairy land where Keating is still Prime Minister and petrol costs 45c a litre … it’s the only logical conclusion that can be drawn from your bizarre statements …

“The Snowy has repaid it’s debt many times over through electricity provided to the States at prices deemed by an act of parliament, not competitive “market” prices. It’s far from being an albatross around anyone’s neck.”

Now, where to start. Well lets see. The last time I was involved in the corporatisation of the Snowy Scheme it certainly hadn’t paid back a red cent of the capital investment made by government. Now I’m guessing you either have no idea what the electricity spot market is, or perhaps you worked for the scheme (maybe as high up as janitor or groundsman) but you can bet your own left testicle with confidence that the scheme prior to and after corporatisation sold/sells electricity into the national grid at the spot market price. Cost adjustments were there to allow the scheme to cover the cost of paying its hangers on – sorry I meant – employees – and on-costs rather than addressing anything as ‘frivolous’ as its debt burden – but it never repaid a cent of its capital investment.

And by the way, almost by definition, the schemes ability to sell into the spot market means that it doesn’t sell power into the grid at ‘competitive’ prices – rather it takes advantage of peak demand prices in a highly predatory manner and literally says – if you want more electricity – right now – well sell it to you at our price …

So to recap. The scheme never repaid its debt. You are living in a romantic fantasy land.

Big Al

The Snowy has repaid it’s debt many times over through electricity provided to the States at prices deemed by an act of parliament, not competative “market” prices. It’s far from being an albatros around anyones neck.

Growling ferret, the organisation may make money – but there’s daylight between that and making a profit. Despite its ability to rapidly move in and out of the spot electricity market to capitalise of price peaks (its key strategic asset if you like) the ‘Scheme’ has never paid back a cent of the capital investment made by Australian Tax payers of nearly $1 billion (in 2006 money). The Victorian, NSW and Commonwealth have rightly decided to try and recoup their investment and to write off the outstanding debt through selling off the scheme as a going concern.

The 160 odd jobs that the organisation carried forward to corporatisation adn the additional employemnt through service provision are no doubt a boon for the Snowy mountains community – but they’ll be ther give or take 10-20% regardless of whether or not the ‘scheme’ is sold or not.

Could it be run more efficiently – hell yeah! Is there still a fair bit of dead wood in the staff ranks, you bet!

Big Al

It makes a profit… and employs plenty of people in rural areas. And the fresh fruit and veges you eat probably come from the irrigation area. So go ahead and starve ya troll…

Its about bloody time the albatross around the neck of tax payers was cut loose. Bring it on, I say. The entertainment value from the bleating Stalinists who believe every tawdry bit of infrastructure needs to belong the people is reason enough for selling it off. If Mac Bank does by it, and it turns a profit then at least I’ll get some benefit – not like now when it just sits there sucking up tax-payer dollars faster than the shiny-arsed knobs running the show can spend it.

if they don’t have the balls to fix the cross city tunnel, then they wont get involved in looking after water usage and availability issues for farmers

I worked on the Snowy from the early 80’s to the late 90’s. Through the years from when it was an Operations and Maintenance force and through several organisational reshuffles (i.e. cutting staff in several “only going to happen the once, never going to happen again” voluntary redundancy offers). As the Snowy headed through Corporatisation (basically rebranding the firm, joining an (at the time) hypothetical “electricty sellers market” in Sydney and oh yeah, cutting costs through a few more “once off, never again” voluntary redundancy offers) the first rumours of the “sale” of the Snowy started to be generated (no pun intended).

As Corporatisation took hold, the focus shifter to talk about Privatisation and as they did and cut the staff yet again. This time I put my hand up and left.

Privatisation is supposed to be the greatest thing that could ever happen to the Snowy and maybe it will be but I don’t believe that to be the case. What a lot of people don’t realise is that since it’s inception the Snowy has operated on a Net Cost Of Production basis (i.e. it has never cost the States more than the actual cost of producing the electricity for them to purchase it) and it is also sold to the States at costs based on the Act that created the place with i.e. the electricity is sold to the States at 1949 $$ prices. Of course the States then flog it off at current day prices and make a huge profit on the back of this power sale.

Now I would view that as a guaranteed long-term moneymaker. To coin Bonfires term, the softheads in power are only looking at an immediate profit in this year to get out of what ever jam they are in. If there were any sense in this at all it would be kept as a Government asset. But then again producing electricity generation is one of those things that is not “core government” business (like health or education and most other national or state infrastructure).

Which makes me wonder if things like that aren’t, then what exactly is the business of Government?

Final thought. The Snowy was created for the purpose of irrigation, NOT electric power. The electricity is an after thought by product of the reason. And if you think they are not making money now, you wait till they start charging for WATER to the producers along the MIA. I wonder if the Govt will have the balls to step in then?

local MP steve ‘wanka’ whan is as usual being as useful as tits on a bull – he says he is against the sale while his ALP masters in Sydney sell it. Wow, he really has pull in Sussex Street.

Is anyone forcing them to sell? If not they’re idiots.