Bacchus H. Barren
The answer lies in the Tasmanian Governments desire to transfer part of Hydro Tasmania’s $1 billion debt to Aurora and Transend. This desire is increasingly being driven by the growing realisation that Basslink is evolving to be a huge financial albatross — partly because of the real and hidden cost of the rental agreement, but also because of the burgeoning costs of power imports from Victoria via Basslink. Since the cable commenced operations 10 months ago, almost no Tasmanian power has been sold across the cable (that is no income) whilst imports of dirty coal-fired Victorian power are now running at about 410MW per day. At an average spot price of $35 per MW/h, this means that Tasmania (you and me) is forking-out about $344,000 per day to buy Victorian electricity across Basslink, or an annualised amount of about $125 million — when previously we purchased none at no cost.
IT’S not the voltage that kills you — its the amperage, quickly followed by the bill!
Yes, we hate to tell you that we told you so (that’s not quite true), but keen TT readers will not be shocked by this week’s decision by The Tasmanian Electricity Regulator, Mr Reeve, to grant Aurora carte blanche in hiking domestic electricity prices for Tasmanians.
This will not effect the 16 Major Industries who consume about 45% of the state’s electricity but enjoy long-term fixed hydro contracts at about 2-3 cents/kwh, whilst the rest of us pay 5 times as much.
This decision, which reinforces Tasmania’s position at the top of the list of the nation’s most expensive states for domestic power, was published in the back-pages buried under the Federal Labor Party leadership juggle. Of course the final Aurora tariff tables won’t be made available for another two weeks, just prior to Christmas day, when we are all thinking about the operations of the National Electricity Grid and competitive energy pricing!
As revealed here on TT in early November, (Basslink and bungled power policy) the predicted rubber-stamping of the Aurora price demand went ahead as planned, resulting in an average price increase of $2 per week for every Tasmanian household.
Our calculations last month suggested that the price demand would equate to — thats right — $2 per week (chalk up another strike for TT). Of course there were the predictable wails from Mr. Reeve that he doesnt have the authority to curtail the demand — an interesting definition of the term “Regulator”. Perhaps he should review the name of his office with a view towards the nomenclature of “The Office of the Tasmanian Electricity Price Rubber-Stamper”.
Whilst an extra $2 per week doesn’t sound a great deal (unless of course you are one of the tens of thousands of Tasmanian struggling to make ends meet), with 198,000 domestic connections, the green light to this price hike will net a cool $21.4 million extra for Aurora in 2007. But with no appreciable increase in operating costs, what is the justification for this rude amount?
The answer lies in the Tasmanian Governments desire to transfer part of Hydro Tasmania’s $1 billion debt to Aurora and Transend. This desire is increasingly being driven by the growing realisation that Basslink is evolving to be a huge financial albatross — partly because of the real and hidden cost of the rental agreement, but also because of the burgeoning costs of power imports from Victoria via Basslink. Since the cable commenced operations 10 months ago, almost no Tasmanian power has been sold across the cable (that is no income) whilst imports of dirty coal-fired Victorian power are now running at about 410MW per day. At an average spot price of $35 per MW/h, this means that Tasmania (you and me) is forking-out about $344,000 per day to buy Victorian electricity across Basslink, or an annualised amount of about $125 million — when previously we purchased none at no cost.
So your extra $2 per week is going towards a good cause — the ever growing disaster of Basslink and bungled electricity policy …
And this is just the start!. For more exciting electricity bungle revelations, calculations, and recriminations — stay tuned to this station.
