Boyne Smelters general manager operations Joe Rea announced job cuts due to increased power prices.
Boyne Smelters general manager operations Joe Rea announced job cuts due to increased power prices. Mike Richards GLA200117bsljobs

EXPLAINED: Who's saying what in Boyne Smelter power price battle

JOBS are on the line at Boyne Smelter Limited but there's still time for them to be saved after the state's electricity prices pushed the company to predict job losses.

It's a saga that's questioned the state's electricity prices and its been going on since January 20.

THE LATEST: 'It's hurting': BSL boss desperate to save local jobs

At times it's turned into a he-said-she-said debate.

The state's main electricity generator CS Energy has hit back at claims by BSL and in the meantime it has turned into a game of political football.

It seems the idea of a "fair deal" is different for Boyne Smelter Limited and CS Energy.

CS Energy claims it offered BSL a 12-month contract under $70MWh, but the aluminium smelter says it wasn't "globally competitive".

Here's what has been said so far:

Boyne Smelter Limited:

Boyne Smelter Limited has a deal with the Gladstone Power Station to supply 85% of its power at cost generation. The deal was made in 1994 and is current until 2029.

For the other 15% BSL negotiates a price with the state's electricity generators, with the main company being CS Energy.

Listen: Joe Rea -

 

It may sound like a small percentage, but in reality, it's 150 megawatts an hour, which is enough power to give electricity to every home in the Gold Coast.

Since 2015 BSL has purchased that power on the spot market, which dips and flows according to demand.

But on January 14 the price spiked to more than $13,000MWh.

It's this spike that prompted an announcement by BSL on January 20 that it would cut production by 45,000 tonnes, which meant jobs would be lost.

>> 'Concerned': How power price pushed BSL to cut jobs, production

Since then BSL has said there is still time to save jobs if they can strike an electricity deal to replace usage of the spot market.

This week Mr Rea said it was a "matter of weeks not months" for a deal to be made, or to cut production and jobs.

CS Energy

The state's main electricity generator has defended the January 14 price spike, saying it was prompted by an increased use of electricity during the Queensland heatwave.

>> 'Volatile': Power company says deal was offered to BSL

Non-executive chairman Jim Soorley said a deal was offered to BSL in October last year, but the company didn't take it.

Listen: Jim Soorley

He said it was a deal below $70MWh.

"I told them (the spot market) is a highly qualified, skilled strategy and you're going to get burnt," Mr Soorley said.

The price spike

A national energy regulator investigates prices spikes within the wholesale electricity spot market.

The spot price peaked at $13,888WHh on January 14. In comparison the weekend before the average price was $66.80MWh.

The Australian Energy Regulator, which monitors the National Electricity Market, has confirmed it is investigating the five occasions the price spiked on Friday and Saturday last week.

In each instance the price surged through the $5000 per Megawatt hour threshold.

The AER, which reports on "a foundation to detect non-compliance, market irregularities, inefficiencies and consumer harm", will release its findings mid-March.

Ken O'Dowd, Federal Member for Flynn

 

Federal Member for Flynn Ken O'Dowd.
Federal Member for Flynn Ken O'Dowd. The Observer

 

The Federal Member for Flynn has penned letters to "every minister" in Parliament asking for assistance for BSL.

Mr O'Dowd says Queensland's electricity prices needed to be reviewed.

>> Victorian smelter handed $240m lifeline day after BSL announcement

In the meantime he wants his Government to support BSL, whether it be financially or help them strike a deal with the Queensland electricity generators.

Glenn Butcher, Gladstone's state member

 

 

 

Gladstone's state member Glenn Butcher has defended Queensland's electricity prices.

"(BSL) had been given ample opportunity for good pricing of electricity here in Queensland, and when they were competitive in the market and their prices for aluminium were high, they refused to take those offers," he told media late January.

>> 'Exposed': Power companies, state MP hit back at BSL claims

Gladstone MP Glenn Butcher said the issue had been ongoing for 18 months and he's organised "about 20" meetings with Rio Tinto and the state's two electricity generators with hope to strike a deal for BSL.

He said the State Government would not financially support BSL to help get the company out of trouble.

Mr Butcher has also commended the long-term Gladstone based business on its "extraordinary" and "award-winning" efforts to save on production costs.

"They are second-to-none for the way they streamline their business....," he said.

"...But this is the consequences."

Federal Minister for Resources and Northern Australia Matt Canavan

Senator Canavan, who is the Federal Minister for Resources and Northern Australia, said the state government "has got to be held accountable for this".

"The state government didn't want privatisation and now we're paying the highest electricity rate in the world," the Liberal National Senator said.

"They are doing a woeful job. It is not sustainable if we want to keep jobs. The Queensland Government needs to tell us what their direction is to CS Energy."



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