Action takes its toll

Latrobe Valley’s first power station walk-out in more than a decade has taken a costly toll, with station operator EnergyAustralia warning continued action will jeopardise future employment opportunities at the operation.

In a candid interview with The Express, EnergyAustralia group executive manager operations and construction Michael Hutchinson said the 24-hour stoppage by power generation operators yesterday had cost the company $500,000 in the immediate term.

“That’s the equivalent to five day workers in maintenance for the year; our preference would be spending that money on maintenance rather than (the impacts of) industrial action,” Mr Hutchinson said.

“If this escalates to further strike action, it will be a loss of millions of dollars, and we will have to take a good look at our costs and what we can afford to do like any good business.”

In a move protected by Fair Work Australia as part of a drawn out enterprise bargaining process lead by the Construction Forestry Mining and Energy Union, two separate shifts of generation operators did not arrive for work yesterday.

The station was forced to power down one of four generation units in anticipation of the walkout late Tuesday evening, before bringing in “ticketed operators” and “a number of support personal” to  run the remaining three generators at 80 per cent capacity. 

CFMEU lead negotiator Greg Hardy said the Tuesday night-shift team left the site “without fanfare or incident” in the presence of the management team early Wednesday morning, adding he had harboured serious concerns about the replacement team’s ability to operate the generators safely. However Mr Hutchinson said the company was able to train up and refresh the skills of former operators through an on-site simulator.

“Obviously it’s not ideal… what we’ve done is tried to minimise the complexity of operation by ‘parking’ the units (at a reduced capacity),” Mr Hutchinson said. 

Generation operation responsibilities were due to be resumed with the arrival of the day-shift team this morning, but with both sides accusing the other of failing to “negotiate in good faith”, Mr Hutchinson acknowledged the situation “was not over”. 

The CFMEU is hoping the ramp-up of action will force EnergyAustralia to consider a range of proposed conditions in a new EA, an outcome achieved Loy Yang B power station last fortnight, where an agreement was signed at the eleventh hour, averting a similar 24-hour walkout.

However Mr Hutchinson said due to Yallourn power station’s size and economic standing, the CFMEU was making demands which would affect the station’s ongoing economic viability.

“Yes, we are a big generator, but our units are actually smaller than Loy Yang B and the economics are little bit tougher,” Mr Hutchinson said, adding “hard fought” conditions enjoyed by power station workers over the past decade would not be eroded.

“They have put a whole lot of stuff in there that they know the company can’t agree to; they are creating the optics that the company is not negotiating in good faith. Workers will get a six per cent increase on signing and another five at the end of year in 12 months’ time; that’s an 11 per cent increase on what they’re currently getting,” he said.

Mr Hutchinson said the ongoing industrial action pursuits, which included generation reduction at the station last month, had already forced the company to delay a major 60-day unit outage by 12 months.

He said the $20 million outage, which was due to commence this month, would have generated 220,000 man-hours on and off the site. 

“Unfortunately this delay itself has cost us $2 million; one of the jobs on the outage was installing an (upgraded) turbine which would see that unit improve efficiency by three per cent.” 

“Can you imagine the conversation I now have to have with owners about investment with Yallourn when we are losing money over industrial action; it’s got to impact the confidence of the investors,” Mr Hutchinson said. 

He said a total of 500 jobs sustained at the power station and mine “day-in day-out” were being held to ransom by a small proportion of the workforce, 70 of who were members of the CFMEU.

An Australian Energy Market Operator spokesperson said the state’s power supply would not be affected by the action, as there was sufficient capacity within the power grid to cater for demand.