Queensland Labor to break up troubled CS Energy

Queensland’s CS Energy will likely be broken up after a damning report found organisational chaos and cost-cutting was behind an explosion at a generator.

Callide C power station. Picture: Orin Lucke.

Queensland’s CS Energy will likely be broken up after a damning report found organisational chaos and cost-cutting was behind an explosion at a generator that pushed up electricity prices across Australia’s east coast.

Premier Steven Miles on Tuesday announced a review of CS Energy and other government-owned corporations after the long-awaited release of a draft report into the 2021 explosion at the Callide C power station that cut power to half a million homes.

Despite conceding he had not yet read the technical aspects of the report, Mr Miles disputed the findings of forensic engineer Sean Brady that a major contributor of the explosion was CS Energy being issued government “mandates focused on cost savings” in the years before the incident.

State-owned CS Energy has been in the Federal Court fighting to keep Dr Brady’s report secret even as Mr Miles and Energy Minister Mick de Brenni publicly insisted for months that they ­intended to release it.

On Tuesday, the company backed down and uploaded the latest draft of the report after months of pressure from The Australian and following the airing of damning excerpts in the court hearing on Monday and earlier this month.

The explosion was caused when Callide’s main turbine tripped and back-up battery systems failed to alert workers the generator was drawing, rather than delivering, power to the grid.

In his report, Dr Brady pointed to a litany of errors by CS Energy, with the failure to source an adequate battery-charging system that was “fit for purpose” leading directly to the explosion.

He said organisational factors also pointed to major failings by the company’s management and board and the state government, which is the sole shareholder.

“As a government-owned ­corporation it is obliged to meet shareholder mandates, as well as meet the annual performance indicators contained in the Statement of Corporate Intent,” the draft report states. “In the years leading up to the incident, these mandates focused on cost savings, and performance indicators were dominated by financial and production metrics, as well as personal safety-related metrics.”

After the release of the draft report, Mr Miles announced the review of CS Energy and the ­government’s plans to buy out its private joint venture partner.

Senior government sources said the intention was for CS Energy to broken up and rolled into the state’s other power companies, Stanwell or CleanCo.

“CS Energy will no longer exist and be rolled into the other entities and the hope is the review will back that under a restructure of the GOCs (government-owned corporations),’’ the source said. “It will also depend on what the Australian Competition & Consumer Commission thinks about it.”

Mr Miles dismissed opposition calls for Mr de Brenni to be sacked, saying he had overseen repair work at the facility and would now lead the government “actions reviewing our GOCs”.

“What I know is that Mick de Brenni is the minister best placed to implement these strong reforms, he is overseeing the recommissioning of the Callide generators and that will be finished in the next few weeks,’’ the Premier said.

Mr Miles claimed the only direction from a government minister to cut maintenance had occurred under former premier Campbell Newman in 2012 despite Queensland unions last year accusing the Labor government of running down the facility.

But Dr Brady’s report cited ­internal documents where the government had requested CS Energy consider reducing spending on facility overhauls and had limited using surplus cash on investment in existing and new assets.

Opposition energy spokeswoman Deb Frecklington said Mr de Brenni should be sacked.

“Labor’s Callide scandal is lights out for Mick de Brenni’s ministerial career,’’ she said.

“Treasurer Cameron Dick could very well be on the brink of joining him.”