AGL Energy has dismissed suggestions it would close the Liddell power plant, despite valuing the facility at $0 in a briefing to the Australian Stock Exchange.
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It came after the NSW Government announced on Wednesday that it had concluded the agreement with AGL for the $1.5 billion sale of Macquarie Generation.
In an 84-page document presented to the ASX as part of a $1.23 billion equity raising program, conservative modelling from AGL stated Liddell would close if the Tomago aluminium smelter was shut down in 2017.
The company also indicated in the briefing that it would spend $405 million to reverse erosion and other deterioration at both plants.
AGL head of corporate communications Karen Winsbury confirmed the $0 valuation but stressed it was strictly a worst-case-scenario approach.
“In the valuation model for the purchase of Macquarie Generation there was some conservative, risk-averse assumptions made for the purposes of valuation,” she said.
“One of those is that there could be a closure of Tomago plant and as a result in 2017 that would see the early closure of Liddell.
“But this is purely an assumption for the valuation, and certainly our hope is for it to remain open.”
She added that Liddell had a supply contract with Tomago beyond 2020 and that there was “every expectation” that the arrangement would be fulfilled.
Macquarie Generation currently employs over 600 workers at its Bayswater and Liddell power stations, while a further 1200 are at the Tomago smelter.
As part of the sell-off NSW Treasurer Andrew Constance said that over $700 million would go into ‘Restart NSW’, a fund to help underwrite major infrastructure projects across the state, with the remaining figure going towards existing liabilities.
Upper Hunter MP George Souris said he had been in discussions with then-Premier Barry O’Farrell and more recently Premier Mike Baird to secure an Upper Hunter ‘dividend’.
Mr Souris said the details of such a dividend are yet to be finalised but had been agreed to in principle.
“The benefits of investing a dividend in much-needed infrastructure are a significant positive for the electorate,” he said.
While he didn’t comment on the future of Liddell, Mr Souris said Macquarie Generation employees would not be disadvantaged following the sale.
“I have had many employees tell me that they are taking the opportunity to cash out entitlements and receive entitlements and the privatisation payment while continuing their employment with the company,” he said.
“The employment guarantees and payments involved will be positive for employees.”
Ahead of a meeting with members today, Electrical Trades Union organiser Russell Wilson said he was unaware of any job losses as a result of the takeover but condemned the sale of state-owned assets.
“Once you privatise something it is going to push prices up and it’s going to cost us more,” he said.
“I haven’t seen anything to say we come out in front – electricity, water, those essentials just shouldn’t be privatised.”
Meanwhile the future of the Redbank power station, south of Singleton, is no clearer despite insolvency firm KordaMentha having called for expressions of interest in the purchase of the plant by July 8.
A spokesman for the receiver failed to respond to comment when contacted by the Argus on Wednesday.
The Redbank plant was placed into receivership in October when the company withheld payment on a $3 million loan repayment.