“The NSW Government has washed its hands of the closure planning for Liddell and left it to a council that no longer exists,” said Muswellbrook mayor Martin Rush on Tuesday, after the Department of Planning confirmed it had “no role in regulating the current activities on site”, and referred Newcastle Herald questions about the station’s decommissioning requirements to Muswellbrook Council.

Liddell power station was approved in 1965 by the now defunct Denman Shire Council. Approval documents cannot be located.

Mr Rush will tell the Senate inquiry into the retirement of coal-fired power stations that the government’s failure to impose new and modernised conditions when it sold Liddell and Bayswater power stations means that “from a planning point of view AGL can administer the closures as it sees fit”.

Rehabilitation of man-made Lake Liddell which takes water from the stations, decommissioning of the station buildings and issues relating to the station’s workforce should all have formed part of new conditions, Mr Rush said.

“I can’t believe the NSW Government is saying this is a council's problem,” he said.

The council wrote to the then NSW Treasurer Mike Baird on September 12, 2012, saying conditions of consent for Liddell could not be located and consent conditions for Bayswater, in 1980, “fail to properly reflect modern standards, values and expectations of such a development”.

“Council seeks as a condition of sale of the generating assets, the acceptance of modern consolidating consents for both assets to provide confidence in the future of the site and to confirm the end of life arrangements over both sites,” the council wrote.  

In October, 2012 Mr Baird responded, saying the matter had been referred to then Planning Minister Brad Hazzard and the NSW Treasury transition team.

The following month Mr Hazzard wrote to the council, saying he appreciated its desire to ensure the power stations “operate subject to modern conditions”, but legislation placed responsibility for initiating modifications to existing consents on to consent holders.

Muswellbrook Council replied that it had written to the consent holder, the NSW Government, asking it to modernise the conditions.

Mr Hazzard also referred the council to Liddell’s Environment Protection Licence (EPL), and suggested it contact the Environment Protection Authority to address some of its concerns. Liddell’s EPL, which is available on AGL’s website, carries no information about closure requirements.

Mr Rush will tell the Senate inquiry that the closure of Liddell in 2022, and Bayswater in 2035, will have “a significant impact on the local economy with the loss of 600 direct jobs and associated indirect jobs, as well as flow-on impacts throughout the broader economy”.

“Although no one likes to talk about it in public, getting reliable baseload capacity right from 2022, when Liddell is scheduled for closure, is also critical for the future of the state’s aluminium industry, with a further 1500 direct jobs in the Hunter at stake.”

The Senate inquiry, established in 2016, is considering the case for planned closure of coal-fired power stations, policy mechanisms to encourage the retirement of coal-fired power stations from the National Electricity Market and a just transition for affected workers and communities.

Mr Rush will tell the inquiry that a Hunter Structural Adjustment Fund is “inevitable”, because the region will be one of the hardest hit when a price is put on carbon and industries respond.

“It is critical that these very human impacts are not an afterthought in the debate around climate change policy,” he will say.

Mr Rush will also have tough words for politicians who “pretend that climate change isn’t real” and are “costing jobs every day they delay debate on structural adjustment”.

”Climate change is upon us. It is real, and those politicians that continually pretend otherwise delay the rapid response needed from the consequence of climate change policy on energy policy.”

The Climate Council of Australia told the inquiry decisions to close stations “may have long gestation periods but will crystallise quickly once owners believe commercial circumstances are irretrievable”.

“It should come as no surprise that private owners will make decisions to close or sell, usually expeditiously, to stem monetary or reputational losses to the corporation,” the Climate Council said.

The Australian Government spent more than $88 billion on structural adjustment packages between 2000 and 2012 to help regions encourage revitalisation and reduce unemployment.

An AGL spokesperson said Liddell would close in 2022, and “planning for power station closure, rehabilitation or future site use will be done in consultation with all relevant levels of government, our local communities and employees”.

“This process will start later this year. AGL is also committed to encouraging new business and employment opportunities in the Upper Hunter, and assisting to diversify the local economy.”

The Senate inquiry will hear evidence on Wednesday in Sydney.