Hazelwood sails away from pondage responsibility

Latrobe Valley ratepayers will foot the bill for the management of Hazelwood pondage for the first time in its 40-year history, as GDF SUEZ sails away from a long-held financial responsibility.

After two years of negotiation, a deal has been struck between Latrobe City and the power station which will see council become public managers of the popular waterway at the end of the month.

Mayor Dale Harriman said the new licensing agreement came amid fears GDF SUEZ was otherwise prepared to close off community access to the cooling ponds.

“Within the last couple of months councillors have come to the realisation Hazelwood were prepared to walk away,” Cr Harriman said.

“We read between the lines and decided if Hazelwood weren’t interested in running it for recreational use anymore then that’s where council needed to step in.

“We see the pondage as a huge asset for tourism and community use, with a number of big sporting events held there every year. Without GDF SUEZ council needed to step up and control it.”

At the time council entered into negotiations with GDF SUEZ in 2013, the estimated cost to ratepayers in the first year of management was put at $68,000.

In response to claims about a potential closure to public use, a GDF SUEZ spokesperson only said the company “had no intention of fencing off the facility”.

GDF SUEZ Hazelwood asset manager George Graham said the transfer of the waterway management was logical as public recreation was not the company’s “core business”.

“Latrobe City is best placed to manage these activities at the pondage,” Mr Graham said.

“The transfer of the role will not impact the community’s use of the facility, but rather allow us to concentrate our business on its core function of generating electricity.”

All non-public ‘operational requirements’ will remain the responsibility of GDF SUEZ Hazelwood.

The pondage agreement comes as Latrobe City awaits a Supreme Court ruling over the responsibility of the Morwell Main Drain, adjacent to the open cut mine, which Hazelwood Power Partnership is attempting to have declared a ‘public’ asset.

A finding in HPP’s favour could see ratepayers fund any future repairs to the drain caused by land instability, which in 2011 caused the eight-month closure of Princes Highway, believed to have cost Hazelwood about $10 million.

Councillor Graeme Middlemiss said while he was personally disappointed by the pondage ‘compromise’, the ongoing benefit to the community was outweighed by the costs.

“We didn’t really have a choice. If we called GDF’s bluff and council didn’t step in I do suspect they would’ve closed that facility to the public,” Cr Middlemiss said.

“Closure was the elephant in the room. It was never bluntly stated that they would close it, but that was the underlying implication.”

The new agreement will unlock a $1 million funding commitment from Regional Development Victoria to upgrade the adjacent Hazelwood Pondage Caravan Park.

Latrobe Valley Yacht Club commodore Geoff Conway said the club was glad the complicated matter had finally been resolved, bringing certainty to the waterway’s future.

“Part of the upgrade funding was to put in an appropriate waste management system, the dilemma of course being any older septic system has potential to leak and leach into the pondage,” Mr Conway said.

“Proper waste management will reduce nutrients into the pond and reduce blue green algal grooms. The year before we last missed half our sailing season from related closures.

“This is good news for all users and not just the yacht club.”