You want our water, you have to pay: Latrobe’s message to Spring Street

Latrobe City council has a message for the state government: if you're charging for our water to fix your coal mines, the money stays here.

💧 What’s happening with Latrobe Valley’s water?

As Latrobe Valley’s aging coal-fired power stations retire, the energy companies that run them are seeking to extract vast quantities of water from the region's river system in order to rehabilitate the open-cut mines.

All three mine site operators (Engie, AGL and EnergyAustralia) are planning to fill, or are already filling, their open cut mines with water in an effort to rehabilitate them.

To put the following figures into perspective, a gigalitre is one billion litres:

• Hazelwood (Engie) closed in 2017 and is already being filled with water; it will require  637 GL to fill.

• Yallourn (EnergyAustralia), which will close in 2028, will require 630 GL.

• Loy Yang (AGL), to close in 2035, will need 1,087 GL.

This is an estimated total of 2,354 GL of water that could be removed from the Latrobe Valley river system over three decades - enough to fill Sydney Harbour four-and-a-half times.

💰 How much will these energy companies pay for water?

The state Minister for Water Gayle Tierney is currently considering a submission from AGL to access water for its rehabilitation of Loy Yang. EnergyAustralia is yet to submit an application to use water to fill Yallourn.

Tierney is set to decide on a price between $200 and $260 per megalitre of water used to fill the Loy Yang mine pit.

A decision by the minister is expected in “late 2025”.

🗣️ Senior Organiser for Environment Victoria, Hayley Sestokas, told the Monitor it’s expected this decision will dictate how much EnergyAustralia will pay to rehabilitate the Yallourn mine.

• It’s unclear how much Engie, AGL and EnergyAustralia have been paying for water to operate the coal-fired power stations.

• It’s also unclear how much Engie is currently paying for water to fill up its open cut mine at Hazelwood.

The Monitor sought details from Tierney’s office, but did not receive a response prior to publication.

🏛️ Latrobe City Council wants its share

At a Latrobe City Council meeting on October 27, the council unanimously voted to write a submission to the state government requesting more revenue from the sale of Latrobe Valley water to energy companies be redirected into an economic support package for the council.

🗣️ Latrobe City Mayor Dale Harriman told the Monitor: “We're really keen to see some of that money flow back into council so we can put it into community assets. We don't want to see it disappear into the general revenue in Spring Street.”

The council and environment groups are still calling for further research into the environmental impacts of using water to fill the mine voids.

🗣️ Sestokas said Latrobe Valley’s river system and Gippsland’s lakes are already in a state of decline and if mining companies remove 2,354 GL of water “over the next 30 to 40 years they’ll be starved of the water they desperately need in a drying climate”.

Council documents show the extent to which Latrobe City Council relies on rates paid by the plant operators. 

• The closure of Yallourn will result in the reduction of $2 million in rates revenue from 2027/28. 

• The closure of Loy Yang will result in the reduction of approximately $4 million in rates revenue from 2035/36.