State Electricity Commission of Victoria

SECV logo as used by the 1980s

The State Electricity Commission of Victoria (SECV, ECV or SEC) was a monopolistic electricity generation, transmission and supply utility located in Victoria, Australia. Control of the SECV was by a board of Commissioners appointed by the Victorian Government, following the example of the Victorian Railways, and in contrast to the Departmental control that managed Australian postal and telephone services.

Background

SECV shield as used from formation until the 1970s

When electricity generation first became practical, the main uses were lighting of public buildings, street lighting and later, electric trams. As a result, electricity generation and distribution tended to be carried out by municipalities, by private companies under franchise to the councils, or by joint private-public bodies.[1]

Prior to the establishment of SECV, electricity was generated and distributed by a number of private and municipal generator and distribution companies. The main municipal-owned power station in Victoria was operated by the Melbourne City Council, who generated electricity from its Spencer Street Power Station for the city’s residents, as well as being a wholesale supplier to other municipal distributors. The main privately owned company was the Melbourne Electric Supply Company which was established in the 1880s and operated under franchise arrangements with a number of other municipal distributors. The final major generator of electricity was the Victorian Railways who operated the Newport Power Station, for the supply of electricity to Melbourne's suburban trains. These early generators all relied on a fuel supply provided by the strike prone black coal industry of New South Wales.

History

Formation

Sugarloaf Power Station, part of the Rubicon Scheme

Victoria has large reserves of brown coal located in the Latrobe Valley, to the east of Melbourne. Brown coal has a low energy density due to the high moisture content and would have been uneconomic to transport into Melbourne, but advances in electrical transmission technology meant that electricity could be generated beside the fuel source and transmitted to the consumer.[1] Following an overseas tour in 1911, Herbert Reah Harper, engineer with the Melbourne City Council Electricity Supply Department, recognised the potential for Victorian Brown Coal, after seeing Germany's use, and recommended the establishment of a public utility on the lines of the Ontario Hydro Electricity. He was subsequently appointed to the Victorian Government Brown Coal Advisory Committee (chaired by Department of Mines director Hyman Herman), which reported in September 1917. It recommended the establishment of an Electricity Commission to develop the brown coal reserves and construct a power station and transmission lines. In December 1918, a Bill was passed to establish a Commission with both regulatory and investigative powers, including taking over the enforcement of the existing Electric Light and Power Act, which regulated all electricity generators and distributors.[2]

Legislation passed in December 1920 resulted in the formation of the on the State Electricity Commission of Victoria from the Electricity Commission,[3] with Sir John Monash both chairman and General Manager and Harper appointed as the first chief engineer (he retired in 1936).[4] Funds were also available to the SECV for the development of the works recommended in 1917. The legislation also gave the SECV the authority to decide whether rival organisations could be set up in competition to it, as well as the authority to take over existing private companies when their franchises expired.

The SECV took over a number of small municipal electricity distributors during the 1920s, and in the 1930s the Melbourne Electric Supply Company was acquired along with their street tramway operations. Despite these acquisitions, municipal controlled distribution companies known as Municipal Electricity Undertakings (MEUs) in the inner urban areas of Melbourne remained outside of SECV control until the privatisation of the industry in the 1990s.[1]

The first capital works to be carried out by the SECV was the development of the Yallourn Power Station, briquette factory, and open-cut brown coal mine in the Latrobe Valley. Expansion was also carried out at the Newport Power Station which was fuelled by imported black coal and Yallourn briquettes. Work on hydroelectric power also commenced with the Rubicon Hydroelectric Scheme to the north-east of Melbourne.

Electricity pricing was set by the SECV and had different tariffs for towns of different size, dependent on the costs of providing the electricity supply. Country interests argued that this was unfair to rural consumers, and in June 1928 a conference of rural and regional councils demanded the government equalise of tariffs, but was rejected by the Labor Government. Equalisation of tariffs was not brought in until 1965, and it was due to the SECV itself rather than a response to political pressures.[1]

Growth

Hazelwood Power Station
The modern Yallourn W plant
Newport Power Station in suburban Melbourne

During World War II construction and maintenance work had delayed, and after the war the SECV had difficulty with keeping up with increasing electricity demand. Existing thermal power stations were expanded at Yallourn and Newport, with much bigger generators of 50 MW capacity used, much larger than the 15-25 MW units used pre-war. The hydroelectric resources at Eildon and Kiewa also saw continued development. The Richmond Power Station was also converted to oil firing, and smaller 'prefabricated' power stations were erected in Geelong and Ballarat. These additions resulted in a reduction in the dependence on black coal by the 1950s.

By the 1960s the trend towards more efficient large capacity equipment continued, with additional generators of 120 MW capacity installed at Yallourn, and the Hazelwood Power Station with eight 200 MW units commissioned along with a new open cut mine and briquette factory. The Hazelwood mine was not as successful as planned as Morwell coal was unsuitable for making briquettes, resulting in coal needing to be railed from the Yallourn mine.

By the end of the decade brown coal was used to generate 90 per cent of Victoria's electricity supply, with all of the coal sourced from open cut mines under SECV control. As a result, the SECV was not forced to raise power costs during the 1970s oil price shocks, in contrast to other electricity suppliers around the world.[1]

Expansion in the Latrobe Valley continued though the 1970s with the Yallourn W plant replacing the older units and delivering much greater reliability with Japanese and German technology, compared to the previously utilised equipment from the UK. A new gas fuelled power station was also proposed in the early 1970s for Newport to replace existing plant, but met considerable opposition from nearby residents becoming the first major SECV project that met widespread opposition from the general public.[1] It was not opened until the 1980s and with only half the proposed capacity.

In the 1980s work on a third open cut commenced at Loy Yang, as the Yallourn and Morwell coal fields were both committed to fuel existing power stations. The plan was for two new stations (Loy Yang A and B) consisting all a total of eight 500 MW units, all fed by the common coal mine. The project was hit by cost overruns, with an independent review initiated by the government in late 1982, finding excessive rates of pay for construction and operation staff, poor project management, over investment in both the coal mine and power station and general overmanning.[1]

Electricity costs to consumers also begun to rise in the 1980s, due to the need to pay greater dividends to the Victorian Government and to service greater debt levels from the heavy expansion. The SECV was also a part to the Portland Smelter Contract, which provided the Alcoa aluminium smelter with favourable electricity prices at the expense of other consumers.[1]

Demise

In 1994, the Kennett government disaggregated the SECV into five distribution and retail companies (absorbing the MEUs in the process), five generation companies, and a transmission company. Along with other state-owned utilities (such as the Gas and Fuel Corporation of Victoria), these businesses were all corporatised, then privatised between 1995 and 1999.

The only entities remaining in State Government ownership were the wholesale market operator Victorian Power Exchange (VPX) and the SECV shell which holds indentures for debts owed to it by brown coal development company HRL Limited,[5] and pays Alcoa annual subsidies for its significant electricity needs.[6] VPX was subsequently reorganised with its market and system operation functions being transferred to the National Electricity Market Management Company (NEMMCO) and its transmission planning functions being transferred to VENCorp (now Australian Energy Markets Operator—AEMO).

Currently, the Essential Services Commission of Victoria is responsible for the regulation retail businesses and the Australian Energy Regulator is responsible for regulating distribution, transmission and the wholesale electricity market. [7]

Other responsibilities

The company town of Yallourn

Other than electricity generation, the State Electricity Commission of Victoria also:

See also

References

  1. 1 2 3 4 5 6 7 8 Malcolm Abbott (March 2006). "The performance of an electricity utility: the case of the State Electricity Commission of Victoria, 1925–93". Australian Economic History Review (Volume 46 Issue 1). Economic History Society of Australia and New Zealand. pp. Pages 23–44. doi:10.1111/j.1467-8446.2006.00150.x. Retrieved 2008-07-25.
  2. ↑ Electricity Commissioners Act 1918 (No.2996)
  3. ↑ State Electricity Commission Act 1920 (No.3104)
  4. ↑ SEC Magazine, Sept 1936
  5. ↑ Australian Financial Review 7 July 2011 "HRL keeps $390m in Victorian government deal"
  6. ↑ http://www.audit.vic.gov.au/reports_and_publications/latest_reports/2011-12/20111109-afr.aspx on pages 47-48
  7. ↑ http://www.aemo.com.au/
  8. ↑ Meredith Fletcher (2001). "The house with two lives". Our house: histories of Australian homes. Australian Heritage Commission. Retrieved 2008-07-25.
  9. ↑ John Cleverdon. "SECV Electric Locomotives". Locopage. Retrieved 2008-02-21.
  10. ↑ "Victorian Goldfields Railway". www.vgr.com.au. Retrieved 2008-07-25.

Further reading

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