State Electricity Commission of Victoria

The State Electricity Commission of Victoria (SECV or SEC) was a monopoly 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, in contrast to the Departmental control that managed Australian postal and telephone services. (the use of a Commission followed the example of the Victorian Railways)

Background

When electricity generation first became practical, the main uses was 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.cite web
url=http://www3.interscience.wiley.com/journal/118558740/abstract?CRETRY=1&SRETRY=0
title=The performance of an electricity utility: the case of the State Electricity Commission of Victoria, 1925–93
work=Australian Economic History Review (Volume 46 Issue 1)
date=March 2006
author=Malcolm Abbott
pages=Pages 23 - 44
publisher=Economic History Society of Australia and New Zealand
doi=10.1111/j.1467-8446.2006.00150.x
accessdate=2008-07-25]

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

Victoria had large reserves of brown coal located in the Latrobe Valley, located 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.

The Victorian Government established a Brown Coal Advisory Committee 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 to established 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. [Electricity Commissioners Act 1918 (No.2996)]

Legislation passed in December 1920 resulted in the formation of the SECV from the Electricity Commission, [State Electricity Commission Act 1920 (No.3104)] with Sir John Monash both chairman and General Manager. 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.

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 fueled 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, dependant 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.

Growth

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 addition resulted in a reduction in the dependence on brown 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. The Hazelwood plant was not as successful as planned, with Morwell coal unsuitable for making briquettes resulting in coal needing to be railed from Yallourn.

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 supplier around the world.

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. 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.

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.

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 was the wholesale market operator Victorian Power Exchange (VPX) and the SECV shell. 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.

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

Other responsibilities

Other than electricity generation, the State Electricity Commission of Victoria also:
* Built and managed the company town of Yallourn for workers it the accompanying power station. [cite web
url=http://www.environment.gov.au/heritage/ahc/publications/commission/books/ourhouse/vic10.html
title=The house with two lives
work=Our house: histories of Australian homes
publisher=Australian Heritage Commission
year=2001
author=Meredith Fletcher
accessdate=2008-07-25]
* Produced briquettes at Yallourn and Morwell from brown coal.
* Operated a 900mm gauge electric railway at Yallourn to convey coal from the open cut, later extended to Morwell and Hazelwood.cite web
url=http://locopage.railpage.org.au/private/secv_electric.html
title=SECV Electric Locomotives
author=John Cleverdon
work=Locopage
accessdate=2008-02-21]
* Operated six diesel shunting locomotives identical to the Victorian Railways F class for shunting the Yallourn, Morwell and Newport Powerhouse rail sidings. [cite web
url=http://www.vgr.com.au/stockdiesel.html
title=Victorian Goldfields Railway
publisher=www.vgr.com.au
accessdate=2008-07-25]

ee also

* AGL
* Citipower
* NEMMCO
* Powercor
* SP AusNet
* Alinta
* TRUenergy
* VENCorp

References

Further reading

* cite book
last = Edwards
first = Cecil
title = Brown Power. A jubilee history of the SECV
publisher = State Electricity Commission of Victoria
date = 1969
isbn =
* cite book
last = Gill
first = Herman
title = Three Decades: The story of the State Electricity Commission of Victoria from its inception to December 1948
publisher = Hutchinson & Co
date = 1949
isbn =