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Energy – Subsidising Gas Users


Dr Rosalie Woodruff MP

Dr Rosalie Woodruff MP  -  Thursday, 26 November 2020

Tags: Subsidies, Energy, Hydro Tasmania

Dr WOODRUFF - When you were minister after the 2018 election did you direct Hydro Tasmania to subsidise gas to Tasmanian gas users? If you did what is the cost per year Hydro has had to absorb since the election?

Mr BARNETT - To clarify, you referred to the use of the word 'direction'. There was no direction but there was an arbitration process. The director of energy policy can respond to your question to provide clarity to the process and exactly what happened.

Dr WOODRUFF - Thanks.

Mr TERRY - I probably can't add much more to it. There was an arbitration process, I think it was 2018, between Tasmanian Gas Pipeline, which owns the Bass Strait pipeline and the backbone on-island, and Hydro Tasmania that resulted in the price in turn for the shipping of gas. That's not the underlying gas commodity. Hydro contracts separately for the gas commodity. Hydro has contractual relationships both with the transportation costs and the underlying commodity. There's no direction - I can't remember the original question.

Dr WOODRUFF - Does it subsidise gas for Tasmanian gas users? Does Hydro subsidise gas for Tasmanian gas users?

Mr TERRY - Not directly.

Dr WOODRUFF - What does 'not directly' mean?

Mr TERRY - They share the gas transportation cost via the Tasmanian Gas Pipeline. So it bears a share of that cost. Other consumers would also bear a share of that cost.

Dr WOODRUFF - Thank you. What is that cost? What is the amount?

Mr TERRY - I don't have that information.

Dr WOODRUFF - Okay.

Mr BARNETT - But that's a matter for Hydro Tasmania.

Mr TERRY - It's under a contractual relation, yes, that's right. Yes.

Dr WOODRUFF - Is that contract to be re-negotiated for another four years to 2026 with Tasmanian Gas Pipeline?

Mr TERRY - Yes. I think we're about halfway through the current gas contract with Tas Gas Pipeline. They will start the process of re-negotiating the next gas contract.

Dr WOODRUFF - In what year will they -

Mr TERRY - I believe it's -

CHAIR - Last question.

Dr WOODRUFF - When does it finish, sorry?

Mr TERRY - I think it's 2022. Can I just check that with one of my advisors over there? I think I can confirm this. I think it is -

Mr EVANS - They're shaking their heads.

Mr TERRY - They're shaking their heads.

Mr O'BYRNE - Don't mislead the committee, mate, seriously.

Mr TERRY - That's right. I want to make sure of this.

Mr O'BYRNE - You'll be in the dungeon downstairs.

Mr TERRY - I'm just waiting for the information to come.

Dr WOODRUFF - Thanks.

CHAIR - Minister, we have about 15 seconds to wrap up so is there any information coming?

Dr WOODRUFF - Can I take that answer on notice?

Mr BARNETT - Yes.

Mr TERRY - Yes.

CHAIR - Thank you, everyone. I want to thank everyone for the last four days. It has been a busy four days but we have got to the end of it. We will see a lot of you next week, so thank you.

Mr BARNETT - Madam Chair, thank you to the members of my department who have assisted me and the parliamentary committee today. It's greatly appreciated.