It became obvious that Energex had serious problems when last summer's storm season caused huge power blackouts in south-east Queensland. In early October 2003 more than 35,000 homes in south-east Queensland were without power after a line of severe storms moved through the region.
Other major blackouts followed. Queensland’s fast-growing population and increasing use of air-conditioners strained the power infrastructure and the record for electricity demand was broken six times that summer.
Under pressure to tackle these problems, the Beattie Government appointed a panel led by Pricewaterhouse Coopers partner Darryl Somerville to investigate Energex and its regional counterpart, Ergon.
The Somerville Report, released in July, found the corporations could not guarantee supply and their networks had been neglected. Somerville also found that Energex had maximised profits at the expense of ensuring reliability and since the late 1980s had deliberately implemented a strategy aimed at saving money by driving assets hard.
The report singled out several underlying problems in the management of the networks that need to be fixed, including a lack of service standards, a lack of adequate expenditure over a long period, and internal systems and processes that badly needed improving.
The Beattie Government was also criticised in the report for taking more than $600 million in profits and special dividends from Energex and other energy utilities.
The Opposition seized on this, saying that the Government was largely responsible for the poor state of the grid, but Beattie insisted that poor management of Energex was the main reason for south-east Queensland’s power problems.
The then CEO of Energex, Greg Maddock, was one of several executives berated by Beattie over the poor state of the power network.
On 3 September the Queensland Auditor-General told the Government Maddock had claimed $30,000 from Energex for unusual purposes, including home renovation expenses. It later emerged that Maddock’s claims had in fact been substantially greater.
On 15 September investigators interviewed Maddock over allegations he had misused taxpayer funds.
On 17 September 17 he threw himself under a train, dying instantly.
News of the investigation had been leaked and his widow, Lyn, said Maddock feared that he was going to be used as a scapegoat and his reputation and career would be irreparably damaged.
But the investigation concluded that while the expenditure claims were unusual they had been consistent with the package Maddock had negotiated when he relocated from Sydney to Brisbane in 2001. The then Energex chairman, Don Nissen, had approved the outlays and continued to defend Maddock.
Nissen resigned shortly after the suicide, hinting that Beattie's office had deliberately leaked news of the investigation and this has led to Maddock taking his own life.
But a Crown Solicitor's report found Nissen “did not act in good faith” in negotiating the extra expense arrangements, which he kept secret from the Government and the Energex board.
“It is not unreasonable to conclude that he withheld the details precisely because he knew that the ministers, and very likely the members of the board, would not approve,” the report said.
The report also found Maddock had $72,000 for home renovations but did not act dishonestly.
In October, Beattie appointed Ross Dunning to replace Nissen as Energex chairman, only to learn within hours that Dunning was being investigated over possible criminal offences. Dunning promptly resigned and was soon formally charged.
Then in late November, one of Energex's most senior managers was revealed to have had a dishonesty finding against him.
Brisbane newspaper, The Courier-Mail, reported Don Cleary, 60, had been found to have acted dishonestly as a solicitor.
In a contractual matter arising out of the collapse of Estate Mortgages, Judge Clifford Einstein of the NSW Supreme Court found in 1998 that Cleary's conduct in the deals involved a "degree of moral turpitude or delinquency beyond mere recklessness or thoughtlessness". This decision was upheld by the NSW Court of Appeal in 2000.
The same week that the skeleton in Cleary’s closet was revealed, saw about 80 electricians and linesmen employed by Energex walk off the job at two Brisbane depots.
The 24-hour stoppage marked the start of rolling stoppages intended to secure a new enterprise bargaining agreement and more stoppages were likely, according to ETU assistant state secretary Peter Simpson.
While all of the Energex senior management staff had received generous increases and bonuses recently, the corporation had failed to deliver a wage increase to its workers for the past 17 months, according to Simpson.
The dispute is still unresolved.
Simpson also said that Energex’s infrastructure was so run down it was causing bushfires and safety hazards across southeast Queensland.
In recent months several bushfires had been sparked by power lines hitting the ground after the collapse of crossbars on Energex poles, Simpson told The Australian.
"Through white rot and weathering, these things are literally falling out of the sky," Simpson said. "The network has not been properly maintained and now we're getting bushfires and accidents that are avoidable."
Energex's new chief executive Gordon Jardine admitted decaying crossbars were a major problem.
"We have stepped up a crossbar replacement program," Jardine told the newspaper.
So Energex faces its summer storm season with the prospect of further industrial action and the possibility of its own infrastructure causing bushfires that could trigger blackouts.
As the year draws to a close the corporation has chosen to tie up some loose ends by paying a $43,000 funeral bill for Greg Maddock and by reaching a settlement with Maddock’s estate and family.
In a statement released on Christmas Eve, the Energex Board said it had resolved all outstanding financial matters involving Maddock.
The new chairman Khory McCormick said the terms of the settlement are confidential and no further public comment would be made. Lyn Maddock had sought a $990,000 payout from Energex.
