Hydro to kick start power station

Hydro Tasmania plans to fire up the Tamar Valley Power Station next week for the first time in almost six months.

Hydro chairman Dr David Crean has told parliamentary government business scrutiny hearings this morning that Hydro has made more money by leaving the gas-fired power station dormant since it was forced to relieve Aurora Energy of the asset in June. 

Dr Crean said it had been more profitable to sell the gas that would have been used to run the station to the mainland. 

High rainfall over winter including record inflows in August rendered the Tamar Valley Power Station unnecessary to supply the state's energy needs. 

The debt-laden gas-fired plant wiped $335 million from Hydro's bottom line prompting negotiations with Treasury on future management of the debt. 

Hydro chief executive Steve Davy did not guarantee the future of the asset beyond 2017 when gas supply and transportation contracts are due to expire.

"We're simply not thinking about that at the moment,'' Mr Davy said. 

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