Thursday, May 24, 2012

A qualified victory for new electricity generator in Victoria

New power station approved but only when an old one shuts down.  Excerpts from a Greenie report below

A recent decision by the Victorian Civil and Administrative Tribunal has meant that Victoria’s environment continues to be at great risk from coal pollution.

The company Dual Gas went to VCAT seeking approval to build a 600MW coal-fuelled power station in the Latrobe Valley using ‘syngas’ – a combination of coal and gas to make electricity – which would see Victoria generate dirty coal power for at least another 30 years.

As the environmental regulator, the Environment Protection Authority should have led the charge in standing up to a project that flies in the face of good environmental protection policy.

Instead, in a classic example of failure of leadership, the EPA lacked the mettle to deny the application entirely, instead taking an awkward middle ground of approving a 300MW plant, leaving the door wide open for Dual Gas to push for the full 600MW plant.

One of the key points that VCAT had to consider is the idea of best practice in generating electricity.

VCAT defined best practice by considering syngas electricity as compared to power generated by brown coal, comparing Dual Gas’ project to the profoundly dirty Hazelwood. The trouble with that comparison is that almost anything would be an improvement.

Ultimately, the EPA boxed itself into a corner, unable to justify its compromised position, and lost, with Dual Gas getting approval from VCAT for the full 600MW plant. Fortunately, VCAT listened to DEA’s recommendations and put some conditions on the power station to limit some of the more toxic emissions.

In a twist of fate, VCAT also put a condition on the power plant that has put a freeze on the whole project until some of the more dirty power stations are shut down under the government’s Contracts for Closure scheme.

With uncertainty about the time frame for the closures under the scheme, Dual Gas has put a hold on the development.


Irresponsible court official has  actions nullified

THE recent case involving a Braybrook landowner who fell foul of the Sheriff’s Office offers lessons both for people with unpaid debts and for the authorities tasked with collecting outstanding amounts.

The Supreme Court of Victoria this week overturned the sale of Zhiping Zhou’s family home for the not-so-princely sum of $1000 after the Sheriff offered it at a no-reserve auction in its attempt to recoup $100,000 that Mr Zhou had failed to pay after three years.

For anyone receiving a warrant for the seizure and sale of land, the message flowing from Mr Zhou’s case is simple: when the Sheriffs Office says it is coming for your land, assume it means business and seek immediate legal advice.

For the Sheriff, the message is equally clear: in executing a warrant for seizure and sale you have a common law duty to act reasonably in the interests of both the judgment creditor and the judgment debtor to obtain a fair price.

In this case, a fair price - according to Supreme Court Justice Peter Vickery and Mr Zhou’s lawyers - would have been significantly higher than $1000 and probably closer to the property’s $630,000 market value.

While these type of auctions regularly fetch sale prices well below market value – due to the property owner’s inability to hold out for a better price – one might find it reasonable to assume that the sale of a house valued at over $600,000 would be enough to cover a $450,000 mortgage and the $100,000 Mr Zhou owed to other creditors.

In giving the reasons for his decision, Justice Vickery acknowledges that, while “a fair price is not necessarily the market value”, there should be some floor level, a reserve, below which a sale should not be allowed to proceed.

Under the Sherriff Act 2009, the Sherriff is empowered to sell property seized in accordance with relevant court rules.

To recover a debt, the creditor can apply for a Court judgment classifying the outstanding amount as a judgment debt. A further application can then be made for a warrant of execution – enforceable by the Sherriff – to seize and sell personal property like motor vehicles and household items.

If that personal property is insufficient to cover the judgment debt, the judgment creditor can issue a warrant of seizure and sale, enabling them to sell any land owned by the judgment debtor.

While that process appears to have been followed in the Zhou case, Justice Vickery determined that the judgment debtor is entitled to some protection under common law. In his reasons he states that if it becomes apparent to the Sherriff that the highest bid received at auction is “far below” the true value he would be acting “unreasonably” and in breach of his common law duty to accept it and should therefore pass the property in.

Fortunately these cases are extremely rare and the clarification around common law rights provided by this Supreme Court judgment is likely to make them even rarer.


Carbon tax fight reignites after smelter closure

The Federal Opposition has savaged the Government over the closure of an aluminium smelter in the New South Wales Hunter Valley, blaming the carbon tax.

Norsk Hydro posted a statement on its website saying, among other factors, its long-term profitability would be affected by "increasing energy costs and the carbon tax".

This prompted Opposition Leader Tony Abbott to launch a series of attacks on the Government in Question Time on Wednesday, calling on the Prime Minister to apologise.

Julia Gillard rejected the carbon tax was to blame, instead referring to other reasons cited by the company, including a plunge in global aluminium prices.

Politics aside, for Norsk Hydro workers the closure is a "slug in the guts".

The smelter at Kurri Kurri employs 344 people directly, but Australian Workers Union spokesman Richard Downie says many more will be affected by the closure.  "We've got 400 to 500 women and men up there and they're not all at a retiring age," he said.  "They need to keep working and putting bread on the table, and this is just a real slug in the guts for the Hunter Valley - Newcastle and the Hunter Valley."

On its website, Norsk Hydro says despite extensive efforts to improve the plant's cost position, it has been unable to improve profitability.

"The profitability of Hydro's Kurri Kurri plant has suffered as a result of the continued weak macro-economic conditions, with low metal prices and an uncertain market outlook, as well as the strong Australian dollar," it reads.

"Following a thorough review, it is clear that the plant will not be profitable in the short term with current market prices, while long-term viability will be negatively affected by a number of factors, including increasing energy costs and the carbon tax."
'Final straw'

That statement was seized on by the Opposition's environment spokesman, Greg Hunt.  "What we've seen today is confirmation that the carbon tax is the straw that broke the camel's back for the Norsk Hydro plant at Kurri Kurri," he said.

Liberal Bob Baldwin is the Federal Member for Patterson, which adjoins Kurri Kurri Hydro.  He says previous job losses there have been due to the high dollar and low aluminium price, but says today is the first time Norsk Hydro has blamed the carbon tax.  "But it's not too late. Mr Combet can bring an urgent bill to the house to suspend the carbon tax, because this is the start of things to come," Mr Baldwin said.

The closure arose in Question Time when Mr Abbott asked Ms Gillard to apologise to the Norsk Hydro workers.  "Given that the carbon tax is already a wrecking ball swinging through the aluminium industry, the coal industry, the steel industry and the aviation industry, will the Prime Minister apologise for the 344 workers whose livelihoods are now imperilled by her broken promise never to have a carbon tax?"

Ms Gillard responded with sympathy but not an apology, blaming the closure on the low aluminium price and the NSW Government's refusal to reach agreement on a long-term electricity supply contract.

"So if the Leader of the Opposition is really concerned about these jobs, as opposed to his mock political concern, then he may consider getting on the phone and speaking to his Liberal counterpart, Premier (Barry) O'Farrell, about that matter," she said.


Council carbon tax double standards 'ridiculous'

Nationals Senator Barnaby Joyce says it is unfair for some councils to have to pay the carbon tax while others do not.

A number of councils have been included in the list of organisations that will be subject to the price on carbon.

To help clear up confusion, the Clean Energy Regulator has written to more than 100 councils, generally all with populations above 20,000 and that have landfills, to help them determine whether they will have to pay for the greenhouse gases they produce.

The Federal Government says councils will not have to pay anything next financial year and most of them would not be liable after that.

But Senator Joyce says making a distinction between councils does not make sense.  "This is ridiculous - now we have the concept of righteous lawn clippings and naughty lawn clippings," he said.  "Quite obviously righteous lawn clippings are to be found in the botanical gardens of Sydney, and bad ones are to be found in the Maranoa Regional Council in the middle of Roma."

Among those councils that are investigating if they have to pay the carbon tax are six central-western New South Wales councils - Dubbo, Orange, Bathurst, Mid Western and Young.

A spokesman for Orange City Council says it is not anticipating any impact because it will reduce its greenhouse gas emissions through recycling organic waste, while staff at Bathurst have concluded it will not have to pay.

Lithgow City Council spokesman Andrew Muir says it has engaged an expert to help work out if it faces any liability.  "We got to the point where we thought we needed some help from someone who had experience," he said.  "We had certainly gone through the process, even some time to try to work out if we may be liable.  "Those initial calculations led us to believe that we wouldn't be, but we need to be 100 per cent sure."

Mr Muir says the issue is confusing and needs expert advice.  "Basically a person who is expert in land-filling and also has experience in dealing with the Clean Energy Regulator's (web)site and the calculator, they put together [the numbers] to ascertain the liability," he said.  "We certainly believe we can have that calculation done by the end of the month."


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