As reported exclusively by InDaily yesterday, Coober Pedy District Council is demanding at least $5 million in compensation from the LGA over the involvement of one of its former directors, David Hitchcock, in the outback town’s controversial electricity deal.

InDaily can reveal today that the LGA, which denies the council’s claims, has passed the allegations contained in the council’s claim letter to the Office of Public Integrity for assessment.

“The allegations against the LGA and David Hitchcock are completely without merit and will be vigorously defended,” said LGA chief executive officer Matt Pinnegar.

“Commissioner Lander has authorised the LGA to publish that we have self-reported these allegations to the Office for Public Integrity.”

Lander has also granted InDaily permission to publish the LGA statement. A spokesperson told InDaily the Office of Public Integrity has not yet assessed the allegations, contained in a notice of intention to commence a claim sent to the LGA by lawyers for the Coober Pedy council last week..

The Office of Public Integrity is responsible for receiving and assessing complaints and reports about corruption, misconduct and maladministration in public administration which are referred to Lander.

While the ICAC Act separates the Office of Public Integrity from ICAC in terms of their functions and powers, both offices have the same leadership, with Lander at the top of the administrative tree.

Coober Pedy District Council has hired high-profile Adelaide lawyer Greg Griffin to take up its fight against the power deal.

Last week, he sent a letter of claim to the LGA demanding an interim settlement of $5 million. If the claim isn’t agreed to, the council is threatening to take the LGA to the Supreme Court to recover damages for the losses it believes it will incur from the 20-year electricity deal with energy giant EDL.

InDaily has seen a copy of the council’s letter of demand, in which the argument hinges on the brief tenure of former LGA director Hitchcock as interim chief executive of the Coober Pedy council in 2016.

The letter makes allegations about Hitchcock’s supposed insistence that mayor Michelle Provatidis sign the Power Purchase Agreement (PPA) to enact the 20-year power deal at short notice.

Hitchcock, who no longer works for the LGA but was a director at the time of his secondment to the outback town, has refused to comment on the allegations.

The dispute relates to a $192 million contract for a state and federal government-backed new hybrid-renewable electricity system for Coober Pedy, which was granted to energy company EDL without going to tender.

Coober Pedy council essentially acts as the energy retailer for the town, with the South Australian taxpayer exposed via subsidies the State Government provides to the council to ensure electricity prices are kept on par with those in the city.

EDL, which ran the town’s old diesel generation, has upgraded the infrastructure to include a greater mix of renewables and battery storage. After the system was switched on in July, EDL argues it has passed several significant milestones, including running entirely off renewable energy for more than 24 hours.

The council, though, remains unhappy with deal, which a consultant advised it would cost $85 million more than it should.

Both the state and federal governments backed the deal.