HYDRO Tasmania lost $65.4 million over the past financial year with much of the result’s blame laid at the cost of managing the state’s energy crisis.
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While the result is better than the $90 million loss it forecast in June, it is a $127 million fall from the $62 million profit it achieved the year before.
Chairman Grant Every-Burns confirmed that the company would bounce back this financial year rebuilding water storages, reducing debt from $827 million to $772 million, and promising a small profit.
Much of Hydro’s financial situation in the past year has been blamed on drought and the 176-day Basslink outage, estimated to have cost it between $140 million and $180 million.
Importation of diesel generators cost $64 million and the running of the gas-fired Tamar Valley Power Station cost $47 million.
Hydro Tasmania’s accounting loss was $205 million, due to the negative revaluation of its electricity contracts.
This was roughly balanced out by a valuation rise in its generation assets which translated to a $3.6 million loss.
Meanwhile, the government’s retail energy company Aurora Energy performed much better, achieving a $30 million profit, and TasNetworks a $98 million profit.
Despite the 2015-16 results, Energy Minister Matthew Groom said Hydro’s financial position was still solid and the state’s energy security was stable with dam levels at 44.7 per cent.
He said outside of expenses from the company’s energy supply plan, to deal with the energy crisis, its operating expenditure had reduced.
The government has committed to a $50 million equity payment to the company in 2016-17 to relieve debt though Mr Groom on Thursday could not say where that money would be coming from.
Greens energy spokeswoman Rosalie Woodruff said Mr Groom’s refusal to work with government bodies and residential customers to reduce energy consumption during the crisis resulted in a huge price tag for gas and diesel generation.
“Minister Groom’s determination not to seek energy reductions has risked the long-term financial sustainability of our energy generator,” Ms Woodruff said.
“Nearly half the electricity used in Tasmania during the energy crisis was in the residential, business and government sectors.”
Opposition Leader Bryan Green criticised Hydro for not using the power station in a drought last year, though deciding now to use it while dams were topped up.
Mr Every-Burns said Hydro Tasmania until 2019–20 while it rebuilt its financial strength.
“That does not mean Hydro Tasmania will be unprofitable in that period,” he said.
“The company will work closely with the Tasmanian Government to increase Hydro Tasmania’s financial strength.”
In reaction to the Basslink outage, Hydro has withheld facility fee payments to the company since September as it believes that Basslink Pty Ltd (BPL) owes them money.
While he wouldn’t comment in detail due to pending legal proceedings, Hydro chief executive Steve Davy said the company rejected BPL’s summation that the outage was a force majeure, or unforeseen, event.
He said Hydro would not pay any fees until BPL defined and revealed specifically what caused the outage.
“We don’t believe with Basslink that it’s a force majeure event as that term is meant in the contract,” Mr Davy said.
“What we are doing at the moment is setting off the amounts that we believe BPL owe us.”
BPL has lost $16 million over the past nine months through lost facility fees.