AGY-4706 | Eraring Energy

Full description

Eraring Energy was established by the Energy Services Corporations (Eraring Energy) Regulation 2000. The Regulation amended Part 1 of Schedule 1 of the Energy Services Corporations Act 1995 so as to constitute Eraring Energy as a new State Owned Corporation responsible for generating electricity. (1)

The Regulation was to commence on 1 July 2000 or on the day following the last day on which it was capable of being disallowed under section 41 of the Interpretation Act 1987, whichever was the later. Eraring Energy commenced operations as an energy trading and production entity on 2 August 2000. (2)

Eraring Energy was formed from Pacific Power’s generating assets when they were separated from Pacific Power’s energy services businesses. (3) In 2004, these assets included the Eraring Power Station, Blayney and Crookwell wind farms, and the following hydro-power Stations: Keepit, Warragamba, Burrinjuck, Brown Mountain, Hume, Bendeela and Kangaroo Valley. (4)

The number of directors was set between a minimum of three and a maximum of seven under Eraring Energy’s constitution, the State Owned Corporations 1989 Act, and the Energy Services Corporation Act 1995. (5) The Board’s functions were to: set the strategic direction for the corporation and oversee implementation; appoint the Managing Director and Secretary, monitor performance and oversee the development, succession and reward of the Managing Director and senior management; ensure the development, maintenance and operation of appropriate risk management and people management systems; and ensure the corporation’s values were embraced at all levels and in all activities. (6) The Chairperson is a non-executive director appointed by the shareholders.

At the time of establishment, the Executive management of the corporation consisted of the Managing Director, a Secretary and three General Managers - one each responsible for Production, Trading, and Finance and Business Development. (7) By 2004, there were separate General Managers for Finance and Organisational Development. (8)

Eraring Energy’s subsidiary, Pacific Western, operated and maintained Collie Power Station in Western Australia under contract to Western Power. (9) Pacific Western had its own Board and Executive management.

The Cobbora Coal Project was a joint venture between state-owned power companies Macquarie Generation, Delta Electricity and Eraring Energy to acquire and develop the coal resources at Cobbora. In 2008 each company initially worked through a subsidiary company. These were: Midwest Development Corporation Pty Limited, which was incorporated on 13 August 2008 under the Corporations Act 2001, for which Cobbora Holding Company acquired all shares from Macquarie Generation for $43.2 million on 25 February 2011; Mid West Primary Pty Limited, which was incorporated on 7 August 2008 under the Corporations Act 2001, for which Cobbora Holding Company acquired all shares from Delta Electricity for $43.2 million; and Rocky Point Holdings Pty Limited, which was incorporated on 6 August 2008 under the Corporations Act 2001, for which Cobbora Holding Company acquired all shares from Eraring Energy for $27.7 million on 25 February 2011. (10)

Also in the group were the following entities. Cobbora Management Company Pty Limited was incorporated on 11 February 2009 with its principal activity being to act as agent for the Cobbora Unincorporated Joint Venture. Cobbora Unincorporated Joint Venture was an unincorporated joint venture between Midwest Development Corporation Pty Limited, Mid West Primary Pty Limited and Rocky Point Holdings Pty Limited, with its principal activities being the development and production of coal reserves. CCP Holdings Pty Limited was incorporated on 5 September 2008, with its principal activity being to act as trustee for the Cobbora Coal Unit Trust. Cobbora Coal Unit Trust was formed on 10 October 2008, with its principal activities being to hold assets to assist in the sourcing and development of a coal resource in New South Wales. Cobbora Rail Company Pty Limited was incorporated on 13 January 2011, with its principal activity being to invest in rail operations for the Cobbora Coal Mine. Cobbora Coal Mine Pty Limited was incorporated on 13 January 2011, with its principal activity being to invest in the mining operations of the Cobbora Coal Mine. (11)

In August 2013, the sale of Eraring Energy was completed. The renewable power generation assets were sold to Green State Power and the energy services to Origin Energy. (12)

Endnotes
1. NSW Government Gazette No.59, 19 May 2000, p4111.
2. Eraring Energy Annual Report 2001, p2.
3. Pacific Power Annual report, 2000, p6.
4. Eraring Energy Annual Report 2004, p15.
5. Eraring Energy Annual Report 2004, p28
6. Eraring Energy Annual Report 2001, p28; Eraring Energy Annual Report 2004, p10.
7. Eraring Energy Annual Report 2001, p30
8. Eraring Energy Annual Report 2004, p31.
9. Eraring Energy Annual Report 2002, p17.
10. NSW Auditor-General's Report 2011, Vol. 4, pp.30-31, PDF online at http://www.audit.nsw.gov.au/ArticleDocuments/224/06_Volume_Four_2011_Cobbora2.pdf (accessed 30 July 2014).
11. Ibid., p.31.
12. NSW Auditor-General, Report to Parliament, Eraring Energy, 2013, vol. 4, pp.41-42, https://www.audit.nsw.gov.au/ArticleDocuments/286/04_Volume_Four_2013_Eraring_Energy.pdf.aspx?Embed=Y (accessed 4 June 2015).