The federal, NSW and Victorian governments have pulled hundreds of millions of dollars out of Snowy Hydro, more than it earned in profits, and forced it into debt to fund the payout.
In the year to June, the owners of the Snowy Hydro scheme paid themselves $460 million in dividends, which was nearly twice the $240 million they were paid the year before.
The NSW government banked the bulk of the dividend, since it has a 58 per cent holding in the company, with the Victorian government taking 29 per cent and the federal government getting the remaining 13 per cent.
The large rise in the dividend occurred even though the profit after tax in the year to June rose to just $280.6 million from $259.2 million a year earlier.
This was after booking losses on hedging contracts of $56.6 million.
Without this accounting adjustment, the profit would have been $319.8 million. The profit in the previous year was boosted by gains of $74.9 million on hedging contracts.
High levels of water storage positioned the group to profit since it allowed it to take advantage of price surges in wholesale electricity markets. Snowy Hydro is effectively an "insurer" to others in the power sector, stepping in to provide electricity when asked to do so.
Price spikes, meeting "insurance contracts" held to supply both electricity retailers and other generators at times of high prices or supply difficulties elsewhere in the market, along with improvements in water inflows and storage levels of the Snowy Hydro scheme, were all positive influences on earnings in the year, a spokesman said.
Electricity generated from hydro units surged to 5142 gigawatt hours, significantly above the 3186 gigawatt hours of a year earlier.
Output from its two gas-fired peaking power stations in Victoria - Laverton and the Latrobe Valley - rose slightly to 27 gigawatt hours from 24 gigawatt hours, due to sluggish market conditions.
The group continued to expand retail sales via its Red Energy brand, with customer numbers rising to 336,000 from 310,000, mostly in Victoria.
The former head of Infrastructure NSW, Paul Broad, was appointed recently as the chief executive of Snowy Hydro. He has worked previously in the electricity industry.