Gas supply to Tasmania looking better as parties head to arbitration
Tasmanians will have security of gas supply before the end of the year, with Hydro Tasmania and the owners of the Tasmanian Gas Pipeline (TGP) finally heading to arbitration.
The undersea pipeline is the main way of supplying gas to Tasmania, travelling under the Bass Strait from Longford in Victoria to Tasmania.
Talks to secure the transportation of gas into the state before December have stalled for two years – leading to fears of price hikes and job losses at the state’s major industrials.
Hydro Tasmania has announced it has applied to the Australian Energy Regulator to enter into an arbitration process with the owners of the TGP.
That means the parties will be forced to strike a deal by the end of December or have an interim decision made for them.
Hydro Tasmania chief executive Steve Davy said all other options to resolve the dispute had been exhausted.
“What we are doing [is] what we need to do to make sure Tasmanians have energy security and security of supply of gas in the new year,” he said.
Uncertainty over the supply deal had prompted one major industrial to call for the Government to purchase the infrastructure.
Minerals Council of Tasmania chief executive Wayne Bould said the delay in reaching a deal had made it difficult for companies to invest in infrastructure upgrades.
“The industries have been very concerned over this process for some time. But we still look for a speedy resolution sorting all of that out,” he said.
Public, private sector future rests on outcome
Russell Reid from Goanna Energy Consulting said business, residential and the major industrial consumers would be affected by the outcome of the talks between Hydro and TGP.
He said TGP relied on Hydro Tasmania for 50 per cent of its revenue.
“For Tasmania, it is very important Hydro, on behalf of the Tamar Valley power station, get a good gas price and a good transmission price on the pipeline, but on the other hand, one [where] the price is not so low that it adds cost to the other gas consumers.”
Labor’s energy spokesman Scott Bacon raised concerns about the cost of arbitration to taxpayers.
“The energy taskforce said this issue should have been resolved in March. We still don’t know how much this is going to cost the Tasmanian taxpayers,” he said.
Energy Minister Guy Barnett defended the time it took to refer the matter to arbitration.
“Tasmanians understand that this is normal business practice,” he said.
Mr Barnett would not say why the parties had not secured a deal sooner or how much arbitration would cost taxpayers.