Massive cost blowout at power company, Territory Generation

TREASURER Nicole Manison has sacked the Territory Generation board and flagged further staff cuts as the Government scrambles to keep the lights on amid a massive cost blowout

TREASURER Nicole Manison has ruled out a power price hike as the Government scrambles to keep the lights on amid a massive cost blowout at Territory Generation.

An independent report into the power company, commissioned by Ms Manison at the start of the year, found Territory Generation was bleeding cash and would need an immediate cash injection of about $20 million to keep it afloat.

An unscheduled $20 million loan to Territory Generation was approved last financial year to pay for capital works projects.

Nicole Manison

The corporation has flagged its intention to increase wholesale prices when the tariff freeze expires in July.

But Ms Manison said the Government would honour its election commitment to keep retail power price rises in line with CPI. It’s likely the Territory Government will have to increase subsidies to avoid passing on cost increases to consumers.

Ms Manison foreshadowed job losses within Territory Generation to rein in costs. Annual personnel costs have increased by $13.4 million between July 2014 and July 2017. The number of staff has risen from 171 to 240 in that period, with an increase in senior management positions.

Ms Manison blamed the dire financial position on the CLP’s move to split the former Power Water Corporation into three bodies — Jacana Energy, Territory Generation and Power and Water — in 2014.

“When you turn one thing into three, you replicate senior management three times over, systems three times over,” she said. Other factors included the refurbishment of the corporation’s head office and an increase in fees paid to external consultants, the report said.

Ms Manison on Friday sacked Territory Generation’s board. An interim board, headed by Labor staffer Dennis Bree, has been installed.

The new board would consider all options — including merging the entities back together — to get Territory Generation back in the black, Ms Manison said. Opposition Leader Gary Higgins urged Labor not to backflip on its retail power price pledge.

“Whether it’s an increase on their power bill, or an increase to the subsidies funded by the public purse, either way, in the long run, Territorians will foot the bill,” he said.