Government looking to spread Hydro debt

MOVES to safeguard Hydro Tasmania's finances in the face of worsening projections are being resisted by other state-owned energy businesses.

Hydro bosses and Energy Minister Bryan Green yesterday fronted a parliamentary hearing examining its performance.

Mr Green confirmed Treasury was conducting a review of Hydro's books and was looking at ways to spread the debt weighing Hydro down between the three state- owned energy companies, which will operate from July next year.

The state-owned renewable energy generator was forced to acquire the debt-laden Tamar Valley Power Station from Aurora Energy in June.

The transfer wiped more than $330 million off Hydro's bottom line, adding $205million to its debt levels that have reached $827 million in 2012-13.

But state-owned transmission company Transend is reluctant to shoulder any more of the debt, having already injected $180 million into TasRail.

"There's no available equity sloshing around to provide an equity injection because it's all been committed," Transend chairman Don Challen said yesterday.

Combined with the planned scrapping of the carbon tax, Hydro chairman David Crean warned the outlook for the business was not looking good beyond this financial year.

"If all the negative things come together it's a pretty poor outcome but we have got to make judgments about upsizing and downsizing."

Dr Crean told the hearing the business had made more money by allowing Tamar Valley Power Station to lay dormant.

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 winter rains, including record inflows in August, had rendered the gas-fired plant surplus to Tasmania's energy needs.

However, Hydro plans to fire it up for the first time in almost six months next week.

Mr Green said the government would jump at the chance to sell the power plant, which was built to sure up Tasmania's energy supplies in case of drought, but there had been no takers so far.

Smartphone
Tablet - Narrow
Tablet - Wide
Desktop