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18-040 File G 14 of 33 ELECTRICITY ACT 1994 Section 257 DIRECTION Stanwell Corporation Limited

Definitions and Interpretation

1. In this Direction:

(a) Act means the Electricity Act 1994; (b) AEMO means Australian Energy Market Operator Limited ABN 94 072 010 327; (c) Available Capacity means total electricity generation capacity of a power station capable of being dispatched into the National Electricity Market not including the capacity that is not available due toDNRME planned or unplanned outages; (d) Board means the board of directors of Stanwell;Log (e) Directed Offersch4p4( Volume 7)(1)(c ) Business/commercial/professional/financial onmeans MW; affairs (f) Direction Period means 1 July 2017 to 31 December 2017; (g) Director-General means the director-general of the department responsible for administering the Act and includes any person acting2009 in that office from time to time; (h) MW means a megawatt; (i) MWh means a megawatt hour; Act (j) Peak Periods means the period ending 7:30AM to the period ending 10:00PM (Eastern StandardDisclosure Times) on all weekdays when the major trading banks are Publishedopen for business in Brisbane; (k) Portfolio means the followingRTI market scheduled generators registered with AEMO: Tarong Power Station, Tarong North Power Station, Stanwell Power Station, Barron Gorge Power Station and Kareeya Hydro Power Station; (l) Relevant Persons means the Under Treasurer and the Director-General, or such other person either of them may nominate; (m) Stanwell means Stanwell Corporation Limited (ACN 078 848 674); (n) Total Available Portfolio Capacity means the combined Available Capacity of Tarong Power Station, Tarong North Power Station, Stanwell Power Station, Barron Gorge Power Station and Kareeya Hydro Power Stations;

18-040 File G 15 of 33 (o) Total Available Thermal Portfolio Capacity means the combined Available Capacity of Tarong and Tarong North Power Stations and Stanwell Power Station; (p) Under Treasurer means the chief executive of the department responsible for administering the Government Owned Corporations Act 1993 and includes any person acting in this office from time to time; and (q) Words in the singular include the plural and vice versa, unless the context otherwise requires. Direction

2. We direct Stanwell to, during Peak Periods in the Direction Period:

(a) if Stanwell’s Total Available Portfolio Capacity is greater than the Directed Offer Volume, offer to AEMO to dispatch from the Portfolio a generation quantity equivalent to the Directed Offer Volume at price bands not greater than sch4p4( 7)(1)(c ) Business/commercial/professional/financialMWh; and affairs DNRME (b) if Stanwell’s Total Available Portfolio Capacity Logis less than the Directed Offer Volume, offer to AEMO to dispatch from the Portfolio a generation quantity equivalent to the Total Availableon Thermal Portfolio Capacity at price bands of not sch4p4( 7)(1)(cgreater ) Business/commercial/professional/financial than /MWh. affairs 3. We direct Stanwell to: 2009 (a) consult with the Relevant Persons on Stanwell’s strategy to comply with the direction in paragraph 2; and (b) keep the Relevant Persons reasonably informed of progress to implement that strategy. Act 4. We direct that whereDisclosure there is ambiguity or doubt about the meaning or intent of this PublishedDirection, Stanwell must give effect to the interpretation of the Under Treasurer as advised to Stanwell in a writtenRTI clarifying statement.

Dated at Brisbane this day of 2017 sch4p4( 6) Personal information

The Honourable Curtis Pitt MP The Honourable Mark Bailey MP

Treasurer Minister for Main Roads, Road Safety and

Minister for Trade and Investment Ports Minister for Energy, Biofuels and Water Supply

18-040 File G 16 of 33 SHAREHOLDING MINISTERS FOR

STANWELL CORPORATION LIMITED

Our Ref: 01951-2017

Dr Ralph Craven Chairman Stanwell Corporation Limited GPO Box 800 DNRME BRISBANE QLD 4001 Log

Dear Dr Craven on

Direction under section 257 of Electricity Act 1994

Please find attached a direction to Stanwell Corporation 2009Limited (Stanwell) under section 257 of the Electricity Act 1994.

The Queensland Government is very concerned about the impact of increasing wholesale and retail electricity prices followingAct record price events experienced during summer 2017. The Government has decided to take a number of steps to place downward pressureDisclosure on prices. PublishedThis includes the enclosed direction, which requires Stanwell to take certain steps to bid generation during peak periodsRTI from 1 July 2017 to 31 December 2017. We recognise that this may impact the short-term financial interests of Stanwell. In this respect, the Government is prepared to forgo higher commercial returns potentially available from maximisation of generation profits in order to take actions that contribute to greater electricity price stability, which is fundamental to maximising economic and social benefits for the Queensland community.

18-040 File G 17 of 33 -2-

If you wish to discuss any of these matters, please do not hesitate to contact Mr Paul Simshauser, Director-General, Department of Energy and Water Supply on (07) 3137 4296 or Mr Jim Murphy, Under Treasurer, Queensland Treasury on (07) 3035 1930.

Yours sincerely

HON. CURTIS PITT MP HON. MARK BAILEY MP Treasurer Minister for Main Roads, Road Safety and Ports Minister for Trade and Investment Minister for Energy, Biofuels and Water Supply Level 38 Level 34 1 William Street, Brisbane 1 William Street, Brisbane GPO Box 611, Brisbane GPO Box 2644, Brisbane Queensland 4001 Australia Queensland 4001 Australia Telephone +617 3719 7200 Telephone +617 3719 7300 DNRME Encl. Log on 2009 Act Disclosure PublishedRTI

18-040 File G 18 of 33 BRIEFING NOTE FROM Treasury and Department of Energy and Water Supply FOR Treasurer Minister Trade and Investment Minister for Main Roads, Road Safety and Ports Minister for Energy, Biofuels and Water Supply SUBJECT Direction to Stanwell Corporation Limited on Generation Dispatch Strategy for Q3 and Q4 2017 Contact Officer: Jason Wishart SSPD 303 51914 Reference No 01951-2017

Approval Reason Required Before 02/06/17 Announcement expected on 03/06/17

Approved by Greg Tonks AUT Approved by Graeme Garrett DUT sch4p4( 6) Personal information This briefing note contains confidential legal advice which is subject to legal professional privilege.

PURPOSE 1. The purpose of this submission is to seek yourDNRME signature on the: x direction to Stanwell Corporation Limited (Stanwell)Log under section 257 of the Electricity Act 1994 (Electricity Act) setting dispatch guidelines for generation capacity and pricing during peak periods; and on x letter to Dr Ralph Craven, Chair, Stanwell, issuing the direction. TIMEFRAMES 2009 2. The Queensland Competition Authority (QCA) released its determination for regional Queensland electricity prices on 31 May 2017. Issuing this direction to Stanwell is a key part of the Government’s response. Act BACKGROUND 3. The content of this Disclosurebrief is market sensitive with potential implications for the energy market if Publishedreleased prior to Government announcement of its intentions with regards to its actions to address rising electricity prices.RTI 4. The QCA’s final determination on 2017-18 regional electricity prices contained an increase of 7.1 per cent for households and 8.2 per cent for small businesses in regional Queensland. It is expected that similar, or higher, price outcomes would occur in the South-East Queensland (SEQ) market.

ISSUES

sch3( 2)(1)(b) Cabinet matter - Would reveal consideration of Cabinet/prejudice confidentiality

6. A key step to mitigate the impact on retail electricity prices is for shareholding Ministers to issue an Electricity Act direction to Stanwell regarding guidelines for its generation dispatch strategy for Q3 and Q4 2017.

18-040 File G 19 of 33 -2-

s.73

8. The objective of this direction is to ensure that Stanwell’s generation bidding strategy more closely reflects the underlying cost of generation. In this respect, the maximum price sch4p4(threshold 7)(1)(c ) Business/commercial/professional/financialselected MWh) is consistent affairs with more recent bidding practices by Stanwell. Bidding generation dispatch at this level should be commercially viable for Stanwell, as well as placing downward pressure on forward contract prices.

9. The direction seeks to bind Stanwell to this approach for the period 1 July 2017 to 31 December 2017. The results of this approach will be monitored to consider any need to extend its duration, also noting progress to achieve the complementary approach of bringing Swanbank E back on-line from 1 January 2018.

10. It is proposed to issue the direction under the Electricity Act. A direction under section 257 of the Electricity Act requires shareholding MinistersDNRME to be satisfied that it is necessary or convenient to help or give effect to the objects of the Electricity Act, one of which is to ‘ensure that the interest of customers are so protected’. As the Logdirection will put downward pressure on electricity prices, which may be viewed as being ‘protective’ of customers, it meets the relevant objective of the Electricityon Act.

LEGAL ADVICE 11. 2009

sch3( 7) Information subjectAct to legal professional privilege PublishedDisclosure FINANCIAL IMPLICATIONS RTI 12. This direction will constrain the bidding strategy of Stanwell and restrict its ability to take advantage of market conditions and maximise generation profits as per Q1 2017.

RESULTS OF CONSULTATION

13. DEWS have been consulted in the preparation of this brief and supports the recommendations.

18-040 File G 20 of 33 -3-

RECOMMENDATION

14. That you sign the:

x direction to Stanwell under section 257 of the Electricity Act setting dispatch guidelines for generation capacity and pricing during peak periods; and

x letter to Dr Ralph Craven, Chair, Stanwell, issuing the direction.

Jim Murphy Paul Simshauser Under Treasurer Director-General Department of Energy and Water Supply // // Approved Not aDNRMEpproved Noted Comments Log on

______HON. CURTIS PITT MP Treasurer 2009 Minister for Trade and Investment // Act Approved Not approved Noted Comments Disclosure PublishedRTI

______HON. MARK BAILEY MP Minister for Main Roads, Road Safety and Ports and Minister for Energy, Biofuels and Water Supply

18-040 File G 21 of 33 DNRME Log on 2009 Act Disclosure PublishedRTI

18-040 File G 22 of 33 From: [email protected] [[email protected]] Sent: Thursday, 1 June 2017 7:47 AM To: [email protected]; GEOGHEGAN Garrett; WEBSTER Gayle Subject: Documents Attached: 01951-2017 Direction to Stanwell for Pricing Strategy for Q3 and Q4 2017 Due: 19/06/17 01951-2017 Attachments: 019512017OTHER019512017SHMPricingDirectiontoStanwells257ElectricityActFINAL290517.docx; 019512017REPLY019512017SSPDBriefSHMEnergyWater.docx; 019512017LETTER019512017LetterSHMStanwell.docx

Documents for URGENT signature Will be delivered ASAP

Item Number 01951-2017 has been sent to you for review. Attached are document(s) you should review.

Item Details Document Type: Shareholding Minister Document Subject: URGENT Direction to Stanwell for pricing strategy for Q3 and Q4 2017 Final due date: 19/06/17

You should either: 1. View any attachments. 2. Note this information for future reference. email: EmailAttachmentAdvice DNRME ******************************************************************************************************************************************************************* Only an individual or entity who is intended to be a recipient of this e-mail may access or use the information contained in this e-mail or any of its attachments. Opinions contained in this e-mail or any of its attachments do not necessarily reflect the opinions of Queensland Treasury. The contents of this e-mail Logand any attachments are confidential and may be legally privileged and the subject of copyright. If you have received this e-mail in error, please notify Queensland Treasury immediately and erase all copies of the e-mail and the attachments. Queensland Treasury uses virus scanning software. However, it is not liable for viruses present in this e-mail or in any attachment. *******************************************************************************************************************************************************************on 2009 Act Disclosure PublishedRTI

18-040 File G 23 of 33 SHAREHOLDING MINISTERS FOR

STANWELL CORPORATION LIMITED

Our Ref: 01951-2017

Dr Ralph Craven Chairman Stanwell Corporation Limited GPO Box 800 DNRME BRISBANE QLD 4001 Log

Dear Dr Craven on

Direction under section 257 of Electricity Act 1994

Please find attached a direction to Stanwell Corporation 2009Limited (Stanwell) under section 257 of the Electricity Act 1994.

18-040 File G 24 of 33 -2-

Yours sincerely

18-040 File G 25 of 33 ELECTRICITY ACT 1994 Section 257 DIRECTION Stanwell Corporation Limited

Definitions and Interpretation

1. In this Direction:

18-040 File G 26 of 33 (o) Total Available Thermal Portfolio Capacity means the combined Available Capacity of Tarong and Tarong North Power Stations and Stanwell Power Station; (p) Under Treasurer means the chief executive of the department responsible for administering the Government Owned Corporations Act 1993 and includes any person acting in this office from time to time; and (q) Words in the singular include the plural and vice versa, unless the context otherwise requires. Direction

2. We direct Stanwell to, during Peak Periods in the Direction Period:

(a) if Stanwell’s Total Available Portfolio Capacity is greater than the Directed Offer Volume, offer to AEMO to dispatch from the Portfolio a generation quantity equivalent to the Directed Offer Volume at price bands not greater than sch4p4( 7)(1)(c ) Business/commercial/professional/financialMWh; and affairs DNRME (b) if Stanwell’s Total Available Portfolio Capacity Logis less than the Directed Offer Volume, offer to AEMO to dispatch from the Portfolio a generation quantity equivalent to the Total Availableon Thermal Portfolio Capacity at price bands of not sch4p4( 7)(1)(cgreater ) Business/commercial/professional/financial than MWh. affairs 3. We direct Stanwell to: 2009 (a) consult with the Relevant Persons on Stanwell’s strategy to comply with the direction in paragraph 2; and (b) keep the Relevant Persons reasonably informed of progress to implement that strategy. Act 4. We direct that whereDisclosure there is ambiguity or doubt about the meaning or intent of this PublishedDirection, Stanwell must give effect to the interpretation of the Under Treasurer as advised to Stanwell in a writtenRTI clarifying statement.

Dated at Brisbane this day of 2017

The Honourable Curtis Pitt MP The Honourable Mark Bailey MP

Treasurer Minister for Main Roads, Road Safety and

Minister for Trade and Investment Ports Minister for Energy, Biofuels and Water Supply

18-040 File G 27 of 33 BRIEFING NOTE FROM Treasury and Department of Energy and Water Supply FOR Treasurer Minister Trade and Investment Minister for Main Roads, Road Safety and Ports Minister for Energy, Biofuels and Water Supply SUBJECT Direction to Stanwell Corporation Limited on Generation Dispatch Strategy for Q3 and Q4 2017 Contact Officer: Jason Wishart SSPD 303 51914 Reference No 01951-2017

Approval Reason Required Before 02/06/17 Announcement expected on 03/06/17

Approved by Greg Tonks AUT sch4p4( 6) Personal informationApproved by Graeme Garrett DUT This briefing note contains confidential legal advice which is subject to legal professional privilege.

PURPOSE 1. The purpose of this submission is to seek yourDNRME signature on the: x direction to Stanwell Corporation Limited (Stanwell) under section 257 of the Electricity Act 1994 (Electricity Act) setting dispatch guidelinesLog for generation capacity and pricing during peak periods; and on x letter to Dr Ralph Craven, Chair, Stanwell, issuing the direction. TIMEFRAMES 2009 2. The Queensland Competition Authority (QCA) released its determination for regional Queensland electricity prices on 31 May 2017. Issuing this direction to Stanwell is a key part of the Government’s response.

BACKGROUND Act 3. The content of this Disclosurebrief is market sensitive with potential implications for the energy market if Publishedreleased prior to Government announcement of its intentions with regards to its actions to address rising electricity prices.RTI 4. The QCA’s final determination on 2017-18 regional electricity prices contained an increase of 7.1 per cent for households and 8.2 per cent for small businesses in regional Queensland. It is expected that similar, or higher, price outcomes would occur in the South-East Queensland (SEQ) market.

ISSUES

sch3( 2)(1)(b) Cabinet matter - Would reveal consideration of Cabinet/prejudice confidentiality

18-040 File G 28 of 33 -2-

s.73

8. The objective of this direction is to ensure that Stanwell’s generation bidding strategy more closely reflects the underlying cost of generation. In this respect, the maximum price sch4p4(threshold 7)(1)(c ) Business/commercial/professional/financial selected MWh) is consistent affairs with more recent bidding practices by Stanwell. Bidding generation dispatch at this level should be commercially viable for Stanwell, as well as placing downward pressure on forward contract prices.

LEGAL ADVICE 11. 2009

RESULTS OF CONSULTATION

13. DEWS have been consulted in the preparation of this brief and supports the recommendations.

18-040 File G 29 of 33 -3-

RECOMMENDATION

14. That you sign the:

x direction to Stanwell under section 257 of the Electricity Act setting dispatch guidelines for generation capacity and pricing during peak periods; and

x letter to Dr Ralph Craven, Chair, Stanwell, issuing the direction.

Jim Murphy Paul Simshauser Under Treasurer Director-General Department of Energy and Water Supply // // Approved Not aDNRMEpproved Noted Comments Log on

______HON. CURTIS PITT MP Treasurer 2009 Minister for Trade and Investment // Act Approved Not approved Noted Comments Disclosure PublishedRTI

______HON. MARK BAILEY MP Minister for Main Roads, Road Safety and Ports and Minister for Energy, Biofuels and Water Supply

18-040 File G 30 of 33 From: SHANKEY David [[email protected]] Sent: Friday, 2 June 2017 12:44 PM To: SCHNEIDER Darren Subject: Re: SHM Direction to Stanwell re: Generation Dispatch Q3 and Q4

I gave it to Tam yesterday and she was taking it on the plane

On 2 Jun 2017, at 11:37 am, SCHNEIDER Darren wrote:

David

Catherine asked me to check with you to see if this direction had already been signed by the Minister.

We have a copy in MECS and want to make sure there is no double up.

Thanks

Darren Schneider Director DNRME Governance and Regulation Energy Division Log Department of Energy and Water Supply Level 8, 1 William Street, Brisbane on PO Box 15456, City East QLD 4002 Phone: +61 7 3199 4820 Short Dial: 74720 Mobile:sch4p4( 6) Personal information Email: [email protected] 2009

Customers first | Ideas into action | Unleash potential | Be courageous | Empower people Act Disclosure PublishedRTI

18-040 File G 31 of 33 From: DYER Nadia [[email protected]] on behalf of DEWS DLO Sent: Monday, 5 June 2017 5:22 PM To: Corro EWS Minister and DG CC: SHANKEY David Subject: RE: Shareholding - stanwell direction on generation dispatch strategy for Q3 and Q4 2017

Follow Up Flag: Follow up Flag Status: Completed

Categories: Meredith

Hi Team

Ok to e-sig. Tam has confirmed.

Kind Regards

Nadia Dyer Departmental Liaison Officer Department of Energy and Water Supply DNRME

Office of the Hon. Mark Bailey MP Log Minister for Main Roads, Road Safetyon and Ports Minister for Energy, Biofuels and Water Supply ------P 07 3166 0103sch4p4( M 6) Personal information E [email protected] 2009

From: DYER Nadia On Behalf Of DEWS DLO Act Sent: Monday, 5 June 2017 1:47 PM To: 'Tam van Alphen' Subject: Shareholding - stanwell directionDisclosure on generation dispatch strategy for Q3 and Q4 2017 Published Hi Tam, RTI

The Minister missed a signing page, and our corro team want to deliver to Treasury today.

Can we e-sig?

Kind Regards

Nadia Dyer Departmental Liaison Officer Department of Energy and Water Supply

Office of the Hon. Mark Bailey MP Minister for Main Roads, Road Safety and Ports

18-040 File G 32 of 33 Minister for Energy, Biofuels and Water Supply ------P 07 3166 0103sch4p4( M 6) Personal information E [email protected]

DNRME Log on 2009 Act Disclosure PublishedRTI

18-040 File G 33 of 33