The business running a private coal power station crucial for the State has posted a $47 million loss with a stark warning about risks to its survival.
Bluewaters Power supplies about 15 per cent of the electricity on the main grid and will be critically important to keep the lights on as the State Government works to switch off Synergy’s coal units.
The company has been in a bitter dispute with miner Griffin Coal, which collapsed last year amid claims deliveries to Bluewaters had fallen short by 400,000 tonnes. Taxpayers have since stepped in to pump up to $260m into the miner.
Bluewaters directors in annual reports lodged with the Australian Securities and Investments Commission warned the business might not be able to repay debts due in 2027 without long term security for its coal supply.
The State Government had extended Griffin’s mining rights to 2024, with an option of a further year, the report said. Bluewaters said there would need to be a sustainable deal to extend Griffin’s mining rights or a restructure.
The miner’s troubles have sparked other problems for the power station, which has relied on Griffin for water and to dispose of fly ash waste in its pits. Those issues will also need to be resolved for the turbines to keep spinning.
But the report said the utility’s directors had a reasonable expectation a solution can be achieved.
Bluewaters runs two generators in Collie, both operated as separate business entities but both ultimately controlled by Japanese companies Sumitomo and Kansai Electric.
The two units lost a combined $47m in the year to March, documents lodged with the ASIC this week show. That was down from $65m in the prior 12 months.
Revenue was slightly up at $298m — with more income from capacity payments than power sales.
Both entities had negative equity and a shortage of working capital.
The new numbers add to the intrigue about the battle between the miner and the power station which has put the grid at risk and led to spiralling costs for the State Government.
Premier Roger Cook has called for Griffin and Bluewaters to renegotiate their supply deal, arguing earlier this month that the contract locked in the miner to prices below costs.
Bluewaters’ backers argue the loss-making company is not paid enough for the electricity it sells, with government businesses Synergy and Water Corporation the key buyers.
Mr Cook said Synergy already paid “well and truly above the market prices for power”.
Sumitomo and Kansai Electric purchased the power plant for $1.2 billion in 2011, but Sumitomo reportedly wrote down the asset in 2020.
Also that year, “special situation” investors including Oaktree and Elliott Management acquired Bluewaters’ debt at a huge discount.
Bluewaters’ financiers sought to send Griffin into the hands of receivers from KordaMentha in September 2022 and had pledged $20m to fund the process, but Griffin’s own creditors put Deloitte into the business following a court battle.