$180,000 rates windfall

Border Watch
Tuesday 1/5/2007 Page: 10

Glenelg Shire Council and Pacific Hydro have completed the rate agreement for the Portland Wind Energy Project. Shire Mayor Gilbert Wilson said council had actively participated in the State Government's review process of the rating of electricity in Victoria, which was undertaken in 2004 and 2005. The review applied to all electricity generators located in about 15 Victorian municipalities, including coal, hydro, gas and wind generators.

"Together with the Moyne Shire and the Ararat Rural City, the Glenelg Shire took an active approach by advocating for an appropriate rating mechanism for electricity generators, especially given the proposed development of Pacific Hydro's Portland Wind Energy Project," Cr Wilson said. "The Review Panel received a diverse range of submissions from municipalities, electricity generators and industry groups and conducted public hearings.

"Unfortunately, the panel and the State Government did not accept the rating formula suggested by a number of councils." Following receipt of the panel's final report, the State Government amended the Electricity Industry Act (Section 94) to incorporate a formula for the consistent rating of all electricity generators in Victoria.

In summary, the formula specifies a base initial payment of $40,000 plus $900 per megawatt capacity indexed by CPI annually. "Unlike the rate agreements for other large industries, the proposed rate agreement with Pacific Hydro is a procedural document, as the financial formula is prescribed by legislation and cannot be negotiated," Cr Wilson said.

Based on the total number of wind generation towers indicated on the maps provided by Pacific Hydro for the Glenelg Shire section of the Portland Wind Energy Project and the proposed megawatt capacity of the project, the estimated payment in lieu of rates will be around $180,400 per annum with annual CPI increases. However, if the Portland Wind Energy project is built in stages over more than one financial year, the amount will be calculated on a pro rata basis based on the actual installed megawatt capacity.