This article was originally published on the ABC online on August 29 2016 by Richard Baines. To read the original, click here.
Hydro Tasmania’s executives rake in big bonuses in lead-up to energy crisis
There are concerns Hydro Tasmania’s incentive payments scheme is prioritising profit over energy security.
Over the last three years, millions of dollars in bonuses have been paid to senior Hydro staff, and Greens MP Rosalie Woodruff has claimed it was because the Tasmanian Government wanted income rather than to ensure energy security.
In 2012/13 when profits were booming under the carbon tax, Hydro, a government business enterprise (GBE), paid more than $900,000 in bonuses to staff.
The next year it paid more than $600,000 in bonuses and last year, as dams levels dropped, $458,000 in short-term incentive payments were made.
The exact incentive criteria is unclear, but Professionals Australia’s Luke Crowley said making money for Hydro was high on the list.
“It’s for meeting certain performance indicators – we are aware that some are for meeting classic things like safety, but obviously profit is one of the major ones there,” he said,
Tasmania was plunged into an energy crisis earlier this year, as a result of low hydro dam levels and a broken Basslink cable.
Greens claim profit trumps energy security
Greens MP Rosalie Woodruff said the government business was too focused on making money.
“The problem is it’s about the tail wagging the dog at the moment, where it’s the money they make speculating on the national electricity market that is becoming more important than energy security,” she said.
“It’s a huge problem because we’ve got other things we need our GBEs to do for us that’s more important – their first job is to provide us with energy.”
Since the energy crisis, there has been a commitment that the Tamar Valley Power Station would not be sold, and that there would be a feasibility study into building a second Basslink cable.
Energy Analyst Marc White said there needed to be an examination of culture at Hydro Tasmania.
“I think it’s important for the shareholder to think about what are the objectives of the GBE for owning the GBE, and how that plays into setting the targets,” he said.
“Once you’ve worked for a company for just a few short months it’s very difficult to see the culture, so at some point it’s probably important to step back and have a look at the values and behaviours that drive the culture of the business.”
Not enough incentive to ensure energy supply: union
Luke Crowley from union Professionals Australia also had questions.
“Are these incentives being put on the right thing?” he said.
“Obviously from the figures last year we would guess that there’s a big incentive to raise money in the short-term, and perhaps not enough of an incentive to ensure electricity supply for Tasmania.”
Hydro Tasmania declined to be interviewed but in a statement said bonuses were determined by both individual and company performance, and that none would be paid for this financial year.
“Each year, it’s determined by a mix of aspects of individual and company performance,” the statement said.
“There are no short-term incentives being paid to senior executive managers in 2015-16.”
Hydro said the incentives program was reviewed each year, and the energy crisis had nothing to do with employee performance.
“The 2015-16 energy supply challenge was caused by extremely dry spring and summer weather, combined with the first extended outage of the Basslink cable from December 2015. It was not related to employee performance,” it said.
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