A coal station's workers need a closure date more than a closure payment

I closed the coal station where I started work. Bellcarrick Power Station, in the Hunter Valley, shut its last unit on 30 April 2018, the date its owner had announced thirty-one months earlier. Eight years later, people preparing similar closures often ask me what mattered most to the 412 employees who were there at the end. My answer surprises them. It was not the size of the redundancy payments or the retraining budget, although both mattered. It was the date. My position is that the most useful thing a closing operator can give its workforce is a closure date fixed years ahead and kept; that resident contractors must be inside the plan from its first day; and that if a closure has to move, the new arrangement should carry a fixed date of its own.

I should be clear about the limits of my experience. I have closed one station, with a stable workforce, in a region where other employers were within driving distance. The arithmetic of a closure in a single-employer town, or in a district with fewer alternative jobs, would be harder. But the principle of certainty seems to me to travel well.

Why the date mattered more than the money

When Telmora Energy's board considered Bellcarrick's future in 2015, every option on the table was, in one way or another, about flexibility. Finance wanted to close the two oldest units early and run the others for as long as they lasted. Trading wanted no date at all, so that units could be kept available if prices rose. Both proposals were defensible from the company's point of view. Neither gave the people who worked at the station anything to plan around.

A shift operator with twenty years' service has to decide whether to retrain, wait for redeployment, retire early or move his family. Each of those decisions depends on when his job will end. A mortgage, a child's final school years, a partner's work and the timing of access to superannuation all hang on that date. When it is uncertain, people wait. While they wait, the most employable leave first for whatever is available, and the station loses the skills it needs to run safely in its last years.

We told employees the closure date on a Tuesday morning in September 2015, before the market announcement, at shift meetings I attended in person across the whole roster. Within six months every employee had met a financial adviser paid for by the company. Within a year the transition team had a plan for each person, recorded by name. Because people knew the date, they could act on it. Retirements were planned rather than sudden. Retraining was timed to finish before the closure rather than after it. Telmora's other sites could forecast which vacancies to hold for Bellcarrick people.

The money mattered too. The A$31 million transition fund paid for retraining, relocation and advice. But I had seen colleagues at other generators receive generous offers and then make poor decisions because nobody could tell them when the offer would be needed. Certainty made the money useful.

Today the market's rules require a generator to give years of notice before it closes. That is a real improvement for planning the system. It is not the same thing as certainty for a workforce, because a notice can be revised, and a date expressed as no later than a given year is not a date a family can plan around.

The contractors we left outside the plan

Our commitments covered Telmora employees. About 160 resident contractors worked at Bellcarrick every day: maintenance fitters, cleaners, laboratory technicians, coal-handling crews and scaffolders. Many had been at the station longer than most employees. They wore the same protective clothing, attended the same toolbox meetings and ate in the same crib rooms. When the station closed, most lost their work with a few weeks' notice from their own employers and none of the support we had built.

I did not see this clearly until the final year, when a contract fitter I had known for fifteen years asked me why the man at the next bench was being retrained and he was not. I had no good answer. We found some help through the community trust we had established and through the rehabilitation contracts, but it was late and partial.

If I were planning a closure now, I would make contractor transition a condition of every resident contract from the day of the announcement. The contractors' employers would contribute to a shared fund, the operator would match it, and the transition team's plan would cover every person who works on the site, whoever pays their wages. The cost would be modest against the whole closure budget. The fairness argument is obvious. The operating argument is less obvious but real: resident contractors hold much of a station's practical knowledge, and they leave early if they can see no future.

If a closure must move, give it a new date

When wholesale prices rose sharply in 2017, Telmora's trading team asked to keep two of Bellcarrick's units open for another year. In profit terms the case had merit. I recommended against it, and the board agreed, because an extension would have unwound the plans of hundreds of people and because the station's maintenance had been scaled to the closure date. Units maintained for a shorter life are not safely run for a longer one simply because the market would pay for it.

Since then more than one closure in the market has been deferred, sometimes at a government's request because the system needed the capacity. I do not argue that a closure date can never move. The reliability of supply is a legitimate reason, and the market operator's assessments deserve weight. My argument is that a deferral should be treated as a new closure, with a new fixed date, a renewed transition plan and a fresh conversation with every employee and contractor. An open-ended extension, or a sequence of one-year extensions, gives the workforce the worst of both worlds: the anxiety of a closure without the ability to plan for it.

There is a commercial objection. An owner may value the option to run longer if prices are high, and a fixed date removes that option. I accept the cost. Optionality has value to a company, but it is paid for by its workforce, and that cost falls on the people least able to bear it.

The towns around closing stations deserve the same respect. The town near Bellcarrick knew the date as soon as our employees did, and its council planned around it. When I go back, people still describe the closure as hard but fair. I would rather leave that verdict than a few more months of margin.