State Electricity Commission exposes lunacy of the windmills of Dan Andrews’ mind

The reborn State Electricity Commission has even less financial metrics than the NBN. There probably isn’t even a drinks coaster.

Victorian Premier Daniel Andrews is proposing pour billions into building supposedly great and necessary infrastructure. Picture: NCA NewsWire / Nicki Connolly

Just exactly how many billions – indeed, tens of billions – of dollars is Victoria’s re-elected Great Leader Dan Andrews proposing to add to the state’s debt, already heading for $200bn, on the way to $400bn, by bringing back the State Electricity Commission?

The question is brought into very stark relief by NBN finally ‘fessing up to the fact that $31bn of the $44bn spent on the network so far, has been – if you’ll excuse the technical jargon – flushed straight down the toilet.

Now true, venturing deep into Monty Python Dead Parrot territory. You know, the parrot isn’t dead, it’s just resting. The NBN hasn’t actually written off the $31bn as unrecoverable, but placed it in fiscal limbo until 2040.

It’s a marvellous idea that every citizen should be able to use for – I dunno – electricity and gas bills? I’m not failing to pay them right now; just suspending repayment until after 2040.

In the real world, NBN has spent $44bn. The $31bn might be physically in the ground but it’s also gone down the fiscal toilet. In simple terms, if the government tried to sell the NBN, a rational buyer would only be prepared to pay $13bn, tops.

Let me hasten to add, I most absolutely do not want it to be sold. Despite the overspend – indeed, in large part precisely because of the overspend – we now have what is arguably the primary 21st century national asset and it must remain in public ownership.

That said, it – especially in the form originally thought up and detailed on the back of a drinks coaster during a VIP government flight – should be the most explicit warning of the fiscal idiocy of marrying a good idea with supposed new technology and seemingly unlimited public (borrowed) money.

But just as the awful fiscal reality of the NBN surfaces, we get the Victorian government proposing to do it all again: pour billions into building supposedly great and necessary infrastructure.

Except, in substance, it would be nothing like the old SEC, which for 60 years gave Victorians cheap, reliable and plentiful coal-generated electricity out of the Latrobe Valley.

Now true, the old SEC had its dark side – its massive overmanning, its union and bureaucratic control, which culminated in massive cost-overruns for the last power stations built.

In the worst of all possible worlds, Chairman Andrews proposes to bring back the bad SEC – the inefficiency; while spurning the good – the cheap, reliable and plentiful power.

And with the same wild-eyed look as Kevin Rudd of the person that knows – and I mean, really knows – they possess the real and absolute truth, SEC 2.0 will build hundreds of wind and solar farms and presumably thousands of kilometres of powerlines.

How much will it cost, what revenues will it generate, what are its financial metrics?

Who knows, not excluding said Premier?

The whole idea seems to have been dreamt up in the heat of the election campaign. It has even less financial metrics that the original NBN. There probably isn’t even a drinks coaster.

Not that any numbers would be worth more than four-fifths of five-eighths of copulating all, anyway.

The supposedly deep analysis of the NBN was that it would generate a return of 7 per cent – right from the start, on the entire cost of the lavish all-fibre build.

It would be lucky to generate anything close to that on the $13bn new carrying value.

Victoria’s debt is already heading for $200bn, before the cost of the suburban rail link, which will all-but certainly double it.

Then add SEC 2.0 – a multibillion-dollar product of the, with apologies to Legrand and the Bergman duo, “Windmills of Dan’s Mind”.