Hydro Tasmania’s request for a $300
million cash injection from the State Government this week has raised
questions about the viability of the state-owned company.

Hydro’s
Corporate general manager, Lance Balcombe, said this week that ‘’claims
of a cash crisis at the Hydro were unfounded” – but admitted that the
company would have to look at other options if the request was denied.
Tasmanian Treasurer, Michael Aird, promptly ruled it out.

Hydro
requested the cash to help it fast track repayments on debts totalling
more than $1 billion. The revelation comes only three weeks after the
controversial Basslink undersea electricity cable between Victoria and
Tasmania came online, with the Hydro locked into an annual line rental
of $92m for the next 25 years.

In addition, the Hydro pays an
annual ‘’special dividend” of between $40-60million per year to the
government. An energy industry consultant, speaking on the condition of
anonymity, said the Hydro’s debt was a hangover from the construction
of its last major hydro-electric scheme:

To compound that they, the Hydro, have rushed into Basslink
without even undertaking a study on how to best drought proof Tasmania.
The Government originally heralded Basslink as a sound financial
investment but the line changed around two years ago, to saying that
the project was the best way to drought proof the State.

Basslink
was supposed to allow Tasmania to export electricity to the national
grid when there was an excess and import it when there was a shortage.
All the project has achieved is to expose Tasmania to the national grid.

Tasmania
is suffering from decreasing rainfall and that’s why the Hydro is
diversifying into wind technology and spending a packet on cloud
seeding.

The problem is that as an electricity generator you
need good infrastructure to make money and service your liabilities,
that isn’t happening here and it’s only going to get worse.

Peter Fray

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