Media Release

Peter Gutwein MP
Shadow Minister for Energy

Friday 8th January 2010

Did weak Llewellyn put $100 million of State funds at risk?

The Minister for Energy, David Llewellyn has some serious questions to answer:

• When did he first become aware of the ‘anti-competitive’ strategy that Hydro intended to undertake once Aurora commissioned its Tamar valley power station?
• Was it before or after Hydro began charging what the Regulator described as “monopoly rents” for services to Aurora and other energy market participants?
• What action has he taken and has he even requested a ‘please explain’ from either of the state owned companies at the centre of this debacle?

The damning report by the Economic Regulator that found Hydro “is misusing its market power, extracting monopoly rents and is anti competitive” demands an explanation from the Minister for Energy in regards to what role if any he played and what action he has taken since he first became aware of the behaviour that Hydro was engaged in.

Tasmanian taxpayers put up $100 million to invest in Aurora’s Tamar Valley power station and it is extraordinary that on the day that this publicly owned and funded generator began operating, Hydro, according to the Economic Regulator, misused its market power in a way that “poses a risk to present and future competition”.

It is not good enough for David Llewellyn to simply point to the boards of the two companies and claim that they should be allowed to act as they please. The Minister said yesterday that “both Hydro Tasmania and Aurora Energy are managed by independent boards and expert managers”.

That may well be the case, however Mr Llewellyn is the Minister for Energy and is also one of the two shareholder ministers, along with the Treasurer Michael Aird, who hold the shares on behalf of all Tasmanians and therefore he has a responsibility both as Minister and on behalf of all Tasmanians to ensure that taxpayers funds are not put at risk.

It was the State Government that developed the strategy for Tasmanian taxpayers to put up the $100 million investment to allow Aurora to build the Tamar Valley power station in the first place and it is extraordinary that the first real threat to that investment would come from another State owned entity under the control of the same Minister.