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Hydro saved Tasmania Really?

Hydro saved Tasmania from shocking electricity price hikes, says energy regulator

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HYDRO saved Tasmania from shocking electricity price hikes in 2012-13, a report by the Australian Energy Regulator says.

The State of the Energy Market report found average Tasmanian electricity bills rose by 3 per cent because of the carbon tax, compared with a 12 per cent hit in the ACT.

AER chairman Andrew Reeves said Tasmania’s high concentration of hydro power kept bills down.

“The average carbon pass-through-to-spot electricity prices during 2012-13 was broadly consistent in mainland regions at $17.70 per MWh but significantly lower in Tasmania at $10 per MWh,” he said.

The carbon tax of $23 a tonne, introduced in July 2012, helped Hydro Tasmania to an operating profit of $238 million as it received higher prices without having to pay the tax.

In his annual report Tasmanian Auditor-General Mike Blake found the gas-powered Tamar Valley power station cost almost $17 million in carbon tax.

AER’s report said the tax added 12 per cent to the average ACT power bill, followed by Queensland (9 per cent), Victoria (8 per cent), NSW (7 per cent) and South Australia (4 per cent).

The Coalition Government has said the repeal of the carbon tax would result in an average fall in bills of 9 per cent. But the AER report suggests the repeal would result in only a 3 per cent fall in Tasmania.

The Office of the Tasmanian Economic Regulator is believed to have decided yesterday on a new price determination from January 1.

Sourced from The Mercury

So all of the price rises over the last year have been to prop up Aurora more then create this so called buffer! As Tasmanian people are paying a carbon tax on hydro generated power but that same power when sold via Bass Link is carbon tax free! So who saved who? 😐

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Yet Another Surprise? (Not)

Hydro deep in the red

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THE State Government will examine Hydro Tasmania’s debt level after it posted a $248 million loss last financial year, just days after talking up its operating profit.

Hydro was stung by taking on the Aurora Energy Tamar Valley power station, the acquisition of which wiped $335 million off its books in asset writedowns.

Hydro has debt levels of $866 million after the gas-powered station was transferred at a cost of $205 million from Aurora Energy to Hydro under government energy reforms.

The loss is distinct from last week’s before tax operating profit of $238 million, which was mainly a result of record sales of carbon-free electricity across Basslink.

Chairman David Crean said the loss was largely as a result of taking on AETV and its associated debt as well as the revaluation of hydro generation assets.

“The Government has committed to reviewing our capital structure in 2013-14 to assess the sustainability of Hydro Tasmania’s balance sheet following the transfer of debt from AETV,” Dr Crean said.

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The likely abolition of the carbon tax exacerbated the writedowns of hydro power stations.

“In recent years the value of generation assets increased as a result of the introduction of a price on carbon,” he said.

However, as a result of a range of factors, including a reduction in forecast energy and carbon prices, the value of generation assets was revised downward in 2013.

Liberal Energy spokesman Matthew Groom said it was a $330 million Government stuff-up and that the Government had tried to cover it up.

Deputy Premier Bryan Green said the revaluation of the Tamar Valley power station was a necessary adjustment under accounting standards to reflect the way it would be operated in future.

He said the loss did not affect Hydro Tasmania’s cash position and that the station was an important asset.

The Aurora Energy Tamar Valley power station has barely operated since early July, generating just 3.34 gigawatt hours compared with an average of 34 GWh a week under Aurora.

But Hydro chief executive Steve Davy said operation would resume when the current high rainfall inflows to hydro storages and rivers stopped.

Sourced from The Mercury

So what’s the real story here? Aurora makes a before tax profit, yet Hydro makes a loss. This clearly means that Hydro isn’t a competitive player! Just goes to show that even if the government does eventually open up the retail market for the general consumer there’s no guarantee that the retail costs will be lower if the local power generation company’s can’t even balance the books!

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It's No Wonder (we're feeling bitter)

Hydro Tasmania records historic before-tax profit of $238 million

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ENERGY giant Hydro Tasmania has recorded the largest profit in its history.

The company is crediting increased revenue from renewable exports, the carbon price and increased exports across the Bass Strait for a $238 million before-tax profit for the 2012-2013 financial year.

The result will bring an expected return to the Tasmanian Government during the 2013-2014 year of $263 million — including a dividend of $116 million.

During 2012-13, the business returned $125 million, including a dividend of $51 million.

Hydro Tasmania chair David Crean said Hydro Tasmania expected to return more than $450 million to the state in the next two years.

“This was a year in which the true value of the state’s 100-year investment in renewable energy was finally realised,” Dr Crean said.

“The performance is also notable for the increased proportion of our revenue and profit which comes from the mainland.

“At the same time we continue to be a major purchaser of Tasmanian goods and services with almost $125 million spent locally during the year.” Deputy Premier Bryan Green said today record returns from the Hydro to Tasmanian taxpayers demonstrated the importance of keeping the business in public hands.

“This shows the enormous value of Hydro Tasmania and the dividends it pays helps ensure the Government is able to invest in core services like hospitals, schools and police,” Mr Green said.

“That is why we have decided not to sell or break up Hydro Tasmania or privatise our network of poles and wires that deliver electricity to homes and businesses around the state.”

Key results

OPERATING profit before fair value movement and tax: $238 million

OPERATING cash flow : $262 million

CAPITAL works on hydro asset program : $58 million

TOTAL group revenue : $1578 million

RETURNS to government 2012/13 $125 million

EXPECTED returns to government 2013-14: $263 million

Sourced from The Mercury

Is it any wonder why when the topic of power price gets a mention most people just see red! This latest figure clearly shows that the Tasmanian Government is gouging as much money possible before the electricity market becomes open to commercial competition (if that still goes ahead) Tasmanians have been feeling the pinch for too long when it comes to electricity costs and this report simply rubs salt into those wounds.

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It’s No Wonder (we’re feeling bitter)

Hydro Tasmania records historic before-tax profit of $238 million

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ENERGY giant Hydro Tasmania has recorded the largest profit in its history.

The company is crediting increased revenue from renewable exports, the carbon price and increased exports across the Bass Strait for a $238 million before-tax profit for the 2012-2013 financial year.

The result will bring an expected return to the Tasmanian Government during the 2013-2014 year of $263 million — including a dividend of $116 million.

During 2012-13, the business returned $125 million, including a dividend of $51 million.

Hydro Tasmania chair David Crean said Hydro Tasmania expected to return more than $450 million to the state in the next two years.

“This was a year in which the true value of the state’s 100-year investment in renewable energy was finally realised,” Dr Crean said.

“The performance is also notable for the increased proportion of our revenue and profit which comes from the mainland.

“At the same time we continue to be a major purchaser of Tasmanian goods and services with almost $125 million spent locally during the year.” Deputy Premier Bryan Green said today record returns from the Hydro to Tasmanian taxpayers demonstrated the importance of keeping the business in public hands.

“This shows the enormous value of Hydro Tasmania and the dividends it pays helps ensure the Government is able to invest in core services like hospitals, schools and police,” Mr Green said.

“That is why we have decided not to sell or break up Hydro Tasmania or privatise our network of poles and wires that deliver electricity to homes and businesses around the state.”

Key results

OPERATING profit before fair value movement and tax: $238 million

OPERATING cash flow : $262 million

CAPITAL works on hydro asset program : $58 million

TOTAL group revenue : $1578 million

RETURNS to government 2012/13 $125 million

EXPECTED returns to government 2013-14: $263 million

Sourced from The Mercury

Is it any wonder why when the topic of power price gets a mention most people just see red! This latest figure clearly shows that the Tasmanian Government is gouging as much money possible before the electricity market becomes open to commercial competition (if that still goes ahead) Tasmanians have been feeling the pinch for too long when it comes to electricity costs and this report simply rubs salt into those wounds.

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As expected…

Deputy Premier Bryan Green says sale of Tasmanian energy company Aurora’s customer base off agenda after Treasury advice

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RETAIL competition for Tasmanian energy companies is up in the air with the State Government taking the sale of Aurora’s customer base off the table.

Deputy Premier Bryan Green this morning admitted there would not be full retail contestability in the energy market at the start of next year as previously promised.

Mr Green said selling Aurora’s customer base was off the agenda after advice from Treasury.

He said the sale needed to meet three objectives:

DELIVER competition in the electricity market.

OFFER a fair and reasonable price.

MINIMISE the residual risks and liabilities to the state.

“It is with disappointment that I inform the House that I have recently been advised that the divestment of Aurora’s retail customers is unlikely to achieve these objectives at the current time,” Mr Green told Parliament in a ministerial statement this morning.

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“I have been advised by Treasury that it does not believe that the current divestment process will achieve a fair and reasonable price at this time for Aurora’s retail customers.

“In these circumstances, the Government has decided that continuing with the current divestment process would be neither appropriate nor responsible.”

Mr Green said legislation that has already passed Parliament would allow for retail contestability in the future.

The cost of the move toward retail contestability has added up to $36.5 million, a document tabled in Parliament this morning shows.

Opposition Energy spokesman Matthew Groom, who supported the electricity reforms, said it was not the policy that was the issue.

“This is about the Government’s botched reforms – not the policy,” Mr Groom said.

“Tasmania must be bewildered when the minister said it was a core element of reform … and it has failed.”

Both Mr Groom and Mr Green disputed claims made by Greens energy spokesman Kim Booth who said the Tasmanian wholesale energy market should have also been opened up for competition.

Mr Green said the Greens policy could lead to the sale of Hydro.

“If we did what you wanted to do, there is no coming back,” Mr Green said.

“It is too risky to go down that path.

“We want competition in Tasmania but not at any cost.”

Sourced from The Mercury

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Aurora sale in doubt (no surprises)

Power pledge in jeopardy

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THE State Government could be forced to pull the plug on Tasmania’s landmark energy reforms on the back of undisclosed advice from Treasury.

Energy Minister Bryan Green yesterday confirmed bidding by potential buyers of Aurora Energy’s customer base had been closed almost three weeks before the planned October 14 cut-off.

Tasmanians were counting on the sale of Aurora to inject competition into the local power retail market for the first time.

It was expected at least two interstate companies would fight for a share of Tasmania’s electricity market and offer customers cheaper power.

The reform was due to come into effect on January 1 and the Government has already spent $50 million on the process.

Mr Green said there were parties interested in looking at Aurora’s books, but he would not say how many.

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Opposition Energy spokesman Matthew Groom said the process had turned into another costly debacle.

Mr Green said a ministerial statement would tell the public what was going on.

He said Treasury had told Cabinet on Monday that the circumstances surrounding the sale of Aurora’s customer base had changed.

But he said the Government was still committed to the energy reform process.

Mr Green admitted the public airing of issues connected with the reform process by the Tasmanian Liberals had forced his hand to close the bidding room.

The Tasmanian Greens yesterday said any failure to secure buyers for Aurora Energy would be an energy policy train wreck caused solely by the Labor and Liberal parties’ refusal to support the Greens’ proposal to reform the wholesale market.

Greens Energy spokesperson Kim Booth said the sale of Aurora was almost set up to fail.

“We said all along that failure to address wholesale competition will not only wash the value off Aurora, it will make it difficult to sell off Aurora’s customer base,” he said.

Mr Groom said Labor and the Greens had to be dragged kicking and screaming to support the Liberals’ call to introduce competition into the market.

“And now they have completely stuffed it up, leaving Tasmanians with a $50 million bill,” he said.

“This failure has all the hallmarks of the pre-2010 TOTE sale failure, where Labor also bungled the sale process, leaving taxpayers with a $30 million a year funding deed and ultimately selling the TOTE at a fire-sale price.

“Tasmanians would be scratching their heads wondering how Labor and the Greens could stuff up selling a profit-making business like Aurora.”

Sourced from The Mercury

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Profit First Service Second

Welfare groups call for power discounts for battlers after Aurora profit announcement

BATTLERS should be given power price discounts after the State Government’s windfall $76.5 million profit from Aurora Energy, Tasmania’s peak welfare body says.

Aurora Energy yesterday announced the record profit amid continuing outcry over mounting power prices in the state.

Tasmanian consumers have endured a 100 per cent increase in electricity prices since 2001, including a 10.56 per cent increase in July last year.

Tasmanian Council of Social Service chief executive Tony Reidy said the State Government should help lower income and disadvantaged Tasmanians with its $25 million dividend from Aurora.

“The cumulative increase in electricity costs over the past decade has placed an often intolerable burden on low-income households,” he said.

Mr Reidy said assistance could include additional resources for emergency relief, provision of additional affordable housing and support for better thermal efficiency of low-income households.

“This would show an increased commitment by the Government to alleviating the impact of electricity costs on the health and wellbeing of vulnerable Tasmanians.”

For its part, Aurora attributed the increased profit largely to a reduction in costs and strong management.

Chief executive Peter Davis said: “Profit before tax for the year increased significantly to $84.5 million and reflects the benefit of prior years’ efficiency and restructuring and increased tariffs partially offset by electricity reform costs.”

The company had 994 staff at the end of 2010, but has slightly more than 1000 now.

Energy Minister Bryan Green said the Government did not have plans to give power discounts from Aurora’s profit, saying the dividends would pay for schools, hospitals and police.

“The Tasmanian Government already has one of the most generous concession schemes and hardship provisions in Australia – worth $38 million last year.”

Aurora’s revenue rose 4.3 per cent to $1.56 billion and energy and transmission cost 5.4 per cent more at $1.063 billion.

Energy from Hydro Tasmania cost $52 million more and distribution from Transend $2 million more.

Electricity prices are set by the Tasmanian Economic Regulator, which has approved a price reduction of 5.23 per cent for next year, saving the average household about $140.

ACIL Allen consulting director Stephen Weston saw nothing too problematic about Aurora’s level of profit.

“Aurora is overseen by an independent regulator and its revenue determinations are in the public domain,” he said.

Mr Reidy said that it was important to remember that a price increase of nearly 11 per cent had prevailed during the period of Aurora’s profit, which was unsustainable for ordinary Tasmanians. He said the recent moves to minimise price increases were welcome but had come after a sustained period of annual increases.

Aurora chairman Geoff Willis said the $76.5 million profit before tax was $20.1 million higher than the previous year.

Total returns to the Government including dividend and taxation equivalent would be $38 million, up 36 per cent.

Liberal energy spokesman Matthew Groom said: “Given that power prices have gone up 65 per cent over the past seven years, it would be a worry if Aurora wasn’t making a profit.

“The Government has had over a decade to put downward pressure on power prices but they had to be dragged kicking and screaming towards reform.”

Sourced from The Mercury

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Yo DJ Spin That Wheel…

POWER prices in Tasmania are set to drop by 5.23 per cent next year — in line with retail contestability.

The drop could see the average Tasmanian household save about $140 a year.

The independent Tasmanian Economic Regulator yesterday approved a State Government proposal to see a drop in power prices for Tasmanian households from January 1.

Tasmanian Economic Regulator chairman Glenn Appleyard said yesterday new prices would represent a 5.23 per cent decrease.

Premier Lara Giddings said small businesses could save up to $650 a year on power prices.

“Electricity bills are a big contributor to cost-of-living pressures and I am sure it will come as a relief to families, pensioners and low-income earners to know that prices will fall from next year,” Ms Giddings said yesterday.

“This is all part of the work the State Government has been doing to tackle the rising cost of living. As a result of our energy reform we are confident the sort of power price increases we have seen in recent years will be a thing of the past, with prices set to remain flat or decrease for the foreseeable future.”

Opposition energy spokesman Matthew Groom said Ms Giddings was “seriously out of touch if she thinks power prices were something to gloat about”.

“Over the past seven years, power prices have increased by 65 per cent,” Mr Groom said. “In fact, the January 2014 decrease announced today is almost entirely cancelled out by the increase that was forced on Tasmanians just a few weeks ago on July 1.”

Energy minister Bryan Green said he was astounded the Liberal Party was ridiculing the Government for lowering power prices.

“We know the Liberals take any opportunity to celebrate bad news but now they are unashamedly putting a negative spin on good news,” Mr Green said.

Mr Green said the introduction of retail competition in Tasmania on January 1 next year would put further downward pressure on power prices.

The sale of Aurora Energy’s customer base was expected to be completed by the end of October in readiness for competition, Mr Green

said.

Sourced from The Mercury

The comments on the article say what fellow Tasmanians really feel about the subject matter…  😐

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A promise bound to be broken!

A LOWER price for power in Tasmania is due to be set within weeks.

Deputy Premier and Energy Minister Bryan Green today said the Economic Regulator’s report had confirmed the state’s electricity prices would fall from January next year.

The new prices would be set by the Economic Regulator after the State Government recommended tariffs for approval over the next fortnight, he said in a statement.

“While we can’t say definitively what the decrease will be until then, we are confident that it will be greater than our original prediction last month (of between 1 and 2 per cent),” Mr Green said.

“Electricity prices around Australia are continuing to go up but we are bucking the trend in Tasmania.

“Recent electricity prices rises experienced in Tasmania will soon be a thing of the past.”

Mr Green said the State Government was on target to introduce retail competition in Tasmania’s electricity market from January 1, which would put more downward pressure on prices.

Sourced from The Mercury

So the empty guarantee of price reduction is the best that the government is offering to the people. Why wait until January 2014 when most are struggling to get by now. Although the projected 1-2% is hardly worth making any noise about, given that doesn’t even cover the last increase… 😐

Also note some of the comments on the original article, that gives you a better idea of how the public feel about it.

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Slap in the Face!

TASMANIANS will pay about $20 more for their power for at least the next six months.

A 1.8 per cent increase in electricity bills for the last half of 2013 was yesterday approved by the Tasmanian Economic Regulator, adding about $20 to the average $2300 annual bill.

The rise comes a fortnight after Premier Lara Giddings flagged power price cuts of 1-2 per cent under retail competition next year.

“We believe that we should be able to see energy prices come down in this state by at least 1 per cent,” Ms Giddings said.

The regulator’s approval of the latest increase in Aurora Energy’s electricity charges comes as the Government moves to sell Aurora’s customer base and introduce full retail competition.

Prices have more than doubled since 2000.

The latest increase applies to all residential customers and some small businesses.

Regulator chairman Glen Appleyard said the rise was to cover movements in the consumer price index.

“Renewable energy costs were higher than expected due to increases in the number of certificates the Clean Energy Regulator required retailers to purchase or create,” he said.

He said the determination allowed the price regulations to continue until new arrangements were introduced.

Mr Appleyard said that ordinarily the regulator would have been required to set prices for a 12-month period but in this case it is just for the six months.

“After that date, all residential and some small business customers will have the option of entering into a market contract with one of the retailers who are successful in purchasing Aurora’s retail customers,” he said.

Mr Appleyard said that under the reforms the regulator would determine standing offer prices that apply from January 1 next year.

Sourced from The Mercury

Well this has to be a last ditch cash grab before opening up retail competition right? I mean it was only last week we were being told that power costs were to be going down! This is a confusing message to the people, You can’t say here it’s going to be cheaper but then slug an increase within a week. I’d say the CEO of Aurora must be due a new flash high market sports car for sucking what money there is left in Aurora before the customer base is sold off to whoever buys it.

This is a slap in the face yet AGAIN! 😐

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