Hydro Tasmania has notified the Australian Energy Regulator (AER) of an access dispute between it and the Tasmanian Gas Pipeline (TGP) about the terms of a new contract to provide the Tamar Valley Power Station with gas pipeline access.
Acting CEO Ian Brooksbank said that under the National Gas Rules, this referral is a step to allow Hydro Tasmania to continue to access transport services on the gas pipeline beyond January 1, 2022.
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“Hydro Tasmania has been working to achieve a commercially negotiated outcome, but we have not been able to reach agreement with TGP to date,” Brooksbank said.
“While the Tamar Valley Power Station remains an important backup generation option, with more on-island generation coming online in recent years, we are using less gas than we have historically.
“In our negotiations we have tried to achieve the best possible outcome for Tasmanians. We now consider it is necessary to take this step to safeguard access.
“We remain open to a commercial agreement if appropriate terms are offered by TGP.”
This referral triggers a timeline for an arbitration process, and is the same process that was used to determine the terms of the contract in 2018. Under the National Gas Rules, an arbitrator can make an interim access determination to maintain the conditions of the current contract while negotiations continue.
Hydro Tasmania’s storages are currently at 51.4 per cent, well above the High Reliability Level. The independent Tasmanian Economic Regulator released the Energy in Tasmania Annual Security Review 2020-21 earlier this week, confirming that the State’s energy security is currently rated as high and it considers that there is a very low likelihood that energy in storage will fall below the HRL in 2021-22.
The dispute resolution process is commercial in confidence.