Hydro Tasmania urges careful evaluation of GenTrader proposal

Hydro Tasmania will carefully consider the financial impact of the proposed GenTrader model recommended by the Expert Panel.

The model is part of its solution to some of the challenges facing Tasmania’s electricity industry.

The Gentrader model leaves the day-to-day operation and maintenance of the power stations with the State-owned Generators. The private sector entity that has purchased the rights to the output, the Gentrader, pays to the Generator capacity charges over the life of the contract in return for exclusive access to the capacity of the power station; and monthly amounts to cover fixed and variable costs incurred in running the power station.

The Gentraders also take responsibility for procuring fuel required by the power station.

CEO Roy Adair said Hydro Tasmania had consistently argued in its previous submissions that the GenTrader model would negatively impact the value in Hydro Tasmania and reduce returns to the Tasmanian Government.

Adair said Hydro Tasmania would now consider in detail the 800 plus pages of the Panel’s report, work with Government on evaluating its findings and recommendations, and advise it on the impact of the GenTrader proposal.

“In our submission in response to the draft report we pointed out to the Panel that a substantial cost-benefit evaluation of the original GenTrader proposal should be done and we look for this to be addressed in the final report released today,” Mr Adair said.

“We want to ensure that we are able to make the most of the unique opportunity we currently have to maximise the brand value of Tasmania being the nation’s renewable energy powerhouse.”

Last year Hydro Tasmania recorded a $100 million profit on the back of good rainfall and increased operations on mainland Australia, and is on track for another strong year. The business will return around $118 million to government this year, including a dividend of $49 million, and this is expected to continue to grow in coming years based on the existing business structure.

Mr Adair said Hydro Tasmania looked forward to working with the Government on a practical and economically sound way forward to secure the right balance between a safe and reliable energy network and the lowest possible power prices.