Drop in dam levels not an issue: Hydro

STATE government and opposition ministers have rallied behind Hydro Tasmania's campaign of drawing down water storages to capitalise on the recently axed carbon tax.

Tasmanian Federal Senator Anne Urquhart said she was worried the company had allowed dam levels to drop too low over the past two years in a bid to maximise on the outgoing tax.

Senator Urquhart said she feared the commercial tactic could compromise future supply in the event of drier than normal conditions.

Hydro water storages have dropped from 34.6 per cent to 28.4 per cent over the past 12 months, leaving the network of the state's dams at ``the lower end of the operating range''.

Senator Urquhart said the plunging water levels could force Tasmania to import electricity from interstate.

But a Hydro spokeswoman rejected suggestions the company was draining its dams for financial gain, saying it continued to prudently manage the state's water storages.

The spokeswoman said the company was ``very confident'' there would be no risk to Tasmanian supply if a drought occurred.

Franklin Labor MHA Lara Giddings joined Resources Minister Rene Hidding in praising Hydro's approach, saying the company had been working hard to make the most of the carbon tax.

Ms Giddings said stripping away the tax dealt a blow to the company and the state.

``Obviously this is disappointing for Hydro Tasmania and I acknowledge that they have been using all the resources they can to make the money they can at this point to help the business but more importantly to help Tasmania,'' she said.

Ms Giddings said scrapping the tax would put Hydro under renewed pressure, after the company recently acknowledged the planned repeal was one of the key factors behind shedding up to 100 jobs.

But Energy Minister Matthew Groom said the Opposition was exaggerating the affect of turfing the tax.

``Hydro Tasmania was profitable before the carbon tax was introduced and it will continue to be profitable now that it has been repealed,'' Mr Groom said.


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