THE Greens’ proposal to break Hydro Tasmania’s monopoly could pose a major obstacle to the state government’s plans to shake up the electricity market and lower power prices.
Nanjing Night Net

The Greens finally unveiled their response to the Electricity Supply Industry Expert Panel’s report yesterday outlining their vision for the state to be supplied by 100 per cent renewable energy by 2020.

Importantly, all three parties back full retail contestability, which will give households the ability to choose their electricity retail provider.

However, the Greens and Labor are split on their approach to tackling Hydro’s monopoly.

Both rejected the panel’s recommendation to set up three separate “gen traders”, fearing that would lead to privatisation.

Instead, Labor has proposed regulatory reforms to control the price Hydro charges, while the Greens favour setting up three “trading rooms” to operate separately within the government-owned business.

Greens leader Nick McKim said it was essential to introduce competition into the wholesale market to drive down power prices, given the wholesale component accounted for 40 per cent of electricity bills.

Mr McKim said the Greens’ plan would deliver lower prices and make Tasmania a more attractive option for other electricity retailers, but he was prepared to negotiate with Labor or the Liberals.

“We’re very confident that we’ve got it right and we’ll do everything we can to deliver it in full or as much of it as we possibly can understanding that we, like Labor or Liberal, don’t have the numbers on our own to get anything through the house,” Mr McKim said.

The Greens’ policy also includes:

Mothballing the Tamar Valley power station after 2017, but retaining it in public hands in case of drought.

Selling Hydro’s consulting business Entura and consider selling its mainland retail business Momentum.

Supports merging Aurora’s distribution network with Transend.

Energy Minister Bryan Green said the government’s package of energy reforms remained on track with support from the Greens on key elements.

Liberal energy spokesman Matthew Groom said the split left the government’s energy plans in a shambles.

THE PLAN

How would the Greens’ plan work?

Hydro Tasmania would be responsible for generating the electricity. Three separate entities would be created, called “trading rooms”, and allocated a third each of the power supply to sell on the national electricity market. These would be mainly staffed by Hydro Tasmania employees.

Mr Groom said the Greens’ proposal was no different to the “gen trader” model.

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