Hon Kate Doust questions the Minister for Energy regarding the Muja AB refurbishment project, including write-downs, joint venture losses, project delays, and capacity refund payments. The Minister provides answers detailing costs, timelines, and financial arrangements.

AnsweredQoN 838Legislative Council
Asked
24 October 2012
Portfolio
Energy

QuestionView source ↗

MUJA POWER STATION — REFURBISHMENT
838. Hon KATE DOUST to the Minister for Energy:
I refer to the Muja AB refurbishment.
(1) Has Verve written down the value of this project; and, if
so, by how much?
(2) Has Verve
taken any debt or losses from the Vinalco joint venture on its balance sheet;
and, if so, by how much?
(3) Can the minister confirm that this project did not come
online on 1 October, as he promised?
(4) How much has
been paid or is due to be paid to the Independent Market Operator in capacity
refunds to date, and —
(a) how much is the ongoing daily
refund;
(b) what is the expected total;
and
(c) what is the maximum potential?
(5) Can the minister specify on what date this project will
be completed; and, if yes, what is that date?

AnswerView source ↗

I thank the honourable member for some notice of this
question.
(1) No.
(2) As is
typical of any project, Verve Energy has recognised its share of the joint venture's
start-up costs of $15.7 million. Verve Energy expects to recover these costs
from the joint venture revenues over time.
(3) The
Vinalco Energy joint venture, of which Verve Energy represents 50 per cent and
Inalco Energy 50 per cent, will be required to pay capacity credit refunds to
the Independent Market Operator.
(4) (a) The current estimated refund rate is $25 000 per unit
for each day.
(b) The expected total is $10.7 million.
(c) Not applicable.
While reserve capacity refund
payments are an initial cost to the project, the joint venture anticipates
recovering this cost once the units are operational.
(5) Two of the
Muja AB units will be completed in December 2012, and the remaining two units
in January 2013, which will be in time for the summer peak period. Safety of
personnel is the top priority.

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