Introduction: Understanding Hydro Tasmania
Recent headlines focused on Hydro Tasmania Group’s profit for 2024/25, which plummeted to just $7.5 million – a huge drop from the previous year. But that headline number represents the entire Group, including electricity retailer Momentum Energy and Aurora Energy Tamar Valley (AETV), which operates a gas-fired plant for backup power. These subsidiaries generate a large portion of the Group’s revenue, but don’t contribute significantly to overall profit. This year, they actually performed better than usual, earning $22.2 million in net profit. This leaves Hydro Tasmania itself – the parent company that owns the dams and power stations and the debt, and manages the market risks – with a $14.7 million loss from its main business of generating electricity. Entura, Hydro’s consulting division, is part of the parent company. So, it’s the parent company’s performance that we need to examine more closely.
Delving into the Parent Company’s Profits
The headline profit number doesn’t tell the full story. Beneath the surface lies falling core profits, record‑low electricity generation, and a heavy reliance on financial manoeuvres to prop up the results.
If we strip away changes in asset values and financial instruments, the parent company actually recorded a loss of $14.7 million. This underlying profit is a sharp reversal compared with the five‑year average of $187.3 million (2019/20–2023/24). The only explanation offered was the drought. Hydro’s electricity output plunged to 6,343 GWh, far below the average of 8,627 GWh and the lowest in living memory, certainly the lowest in the last 25 years.
Hedging – the financial safety net: A brief aside
Energy derivatives are an integral part of Hydro’s business at any time. Even more so when drought strikes. To manage the risks of fluctuating prices, Hydro uses energy derivatives contracts to lock in future electricity prices. When market prices move, these contracts can generate gains or losses.
On the way Hydro can be staring at big losses. Five years ago, Hydro’s hedging book was a major problem, with liabilities of $742 million at June 2020. By June 2025, that had been cut to $157 million. These swings which have been quite violent at times, are recorded as fair value gains and losses.
Back to Company Profits
Starting with the basics, shown in this chart, a truncated version of Hydro’s (the parent company) P&L statement:
| HT Parent Co profits 24/25 vs Average 19/20 to 23/24 $m | ||
| 2024/25 | Average 19/20 to 23/24 | |
| Underlying profit before fair value & revaluations | -14.7 | 187.3 |
| Add: Fair value FV gains/(losses) | ||
| FV gains/(losses) energy derivatives | 30.1 | 98.2 |
| FV gains/(losses) other | -28.2 | 110.7 |
| Net profit after FV gains & losses | -12.8 | 396.2 |
| Add: Revaluations & impairments | 366.2 | -82.1 |
| Total income after FV gains and revaluations | 353.4 | 314.1 |
The underlying business, the day‑to‑day sale of electricity, actually lost $14.7 million. That compares with an average of $187 million in underlying profit over the previous five years. In household terms, the wages have dried up. Hydro’s turbines produced the lowest output this century, and the collapse in generation left the company in the red before any financial engineering was applied.
The next layer comes from fair value accounting. Energy derivatives – contracts designed to lock in future electricity prices – delivered just $30 million in gains, far below the five‑year average of $98 million. Other financial assets and liabilities produced a $28 million loss, compared with a healthy $111 million average gain in earlier years. Included here are fair value losses of $60 million in onerous power purchase agreements (PPAs) with Woolnorth Wind Farms (WWF) and Granville Harbour relating to Large Generation Certificates (LGCs).
Put together, these mark‑to‑market swings left Hydro still showing a net loss of $12.8 million after fair value adjustments. In other words, the insurance policies didn’t pay out enough to cover the shortfall although the payout on some has been deferred (see below comments on losses parked in reserves).
Then came the transformation. Hydro revalued its dams and power stations, booking a $366 million uplift. This is not cash in the bank; it is an accounting exercise that says the assets are worth more on paper. But it was enough to flip the story. With the revaluation, Hydro’s total income after fair value gains and revaluations jumped to $353 million, broadly in line with the five‑year average of $314 million. Without it, the company would have reported losses. The house was revalued, and suddenly the family budget looked better.
This second chart makes clear where these profits ended up.
| HT Parent Co profits 24/25 vs Average 19/20 to 23/24 $m | ||
| 2024/25 | Average 19/20 to 23/24 | |
| Underlying profit before fair value & revaluations | -14.7 | 187.3 |
| Add: FV gains & other adjustments (P&L) | ||
| Fair value gains/(losses) energy derivatives | 125.3 | 30.3 |
| FV gains/(losses) other | -28.2 | 110.7 |
| Revaluations & impairments | 144.3 | -60.1 |
| Net profit with FV gains & adjustments | 226.7 | 268.2 |
| Add : Other comprehensive income (OCI) | ||
| FV gains/(losses) energy derivatives | -95.2 | 67.9 |
| Revaluations & impairments | 221.9 | -22.0 |
| Total comprehensive income | 353.4 | 314.1 |
Net profit with fair value gains and adjustments – the portion that flows into retained earnings – was $226.7 million, compared with a five‑year average of $268 million. That is the usable profit, the part Hydro can actually distribute. Another $126.7 million sat in reserves as Other Comprehensive Income, including $95 million of hedge losses parked in equity, waiting to crystallise in the future, and $222 million of revaluation uplift allocated to reserves rather than profit. These amounts don’t show up in earnings now; they sit in the balance sheet until contracts settle or assets are sold.
This distinction matters. Hydro’s increased equity was respectable but was totally reliant on revaluations. Its reserves carried large hedge losses that will hit future profits when they unwind. The headline figure of $353 million masks the fact that the core business lost money and that much of the ‘profit’ is locked away in reserves or based on paper revaluations. The company is presenting a brave face, but the reality is that its operational income is weak, its hedge liabilities remain significant, and its apparent strength rests on financial engineering.
Think of it again in household terms. The wages are down, the insurance payout is modest, but the family has revalued the house and deferred some bills. On paper, the surplus looks healthy. In practice, the day‑to‑day income is under strain. Hydro Tasmania’s 2024/25 profit was not the result of strong operational performance, noting the need carefully manage water storages is critical. That aside, the result was built on accounting adjustments and financial contracts. The numbers reveal the vulnerability: a company keeping up appearances while its core business struggles to generate enough electricity to pay its way as it needs to maintain (save) its water storages for a rainy day.
Hydro’s 2024/25 profit wasn’t the result of strong operational performance. It was largely based on asset revaluations. The company’s main operations are losing money, electricity output is at record lows, and the final outcome is impacted by accounting adjustments rather than sustainable earnings. The numbers reveal the vulnerability: Hydro is presenting a brave face, but its operations are under strain.
While Hydro highlights positive storage levels (7,384 GWh, just over 50%), it downplays a crucial factor – a 700 GWh (around 6.5%) drop in electricity consumption. That fall, combined with paradoxically profitable import activities during 2024/25 which I’ll try to unravel below, makes the picture far more complex than the official narrative suggests. The full story isn’t being told.
There are a few different concepts of profits which need to be understood. The following is a summary of the three levels of profits referred to above. Figures are for the 2024/25 year and an average of the previous five years.
Understanding Hydro’s Different Types of Profit
To make sense of Hydro Tasmania’s 2024/25 accounts, one needs to peel back the layers of profit. The company reports three different measures, each telling a different story – and together they reveal just how far the headline result is removed from the reality of day‑to‑day operations.
The first layer is Underlying Profit. This is the purest measure: the wages minus the bills, stripped of financial engineering. It shows whether Hydro’s core business – generating and selling electricity – is sustainable on its own. In 2024/25, that figure was a loss of $14.7 million. Compare that with the five‑year average of $187 million in profit, and the scale of the decline becomes clear. The drought hammered electricity production, and without the props of accounting adjustments, Hydro’s operations were bleeding cash.
The second layer is Net Profit, which adds back the fair value movements of financial instruments. This is where derivative contracts and other market exposures come into play. Think of it as wages minus bills, plus whatever you made or lost on your investments this year. Even with all the fair value movements Hydro still made a loss of $12.8 million in 2024/25 – far below the five‑year average of $396 million. But it took the exclusion of deferred losses of $95 million on certain of the hedges ( as permitted by accounting standards) to produce a net profit which shows just how dependent the accounts are on swings in electricity prices and the mark‑to‑market value of hedging contracts.
The third layer is Other Comprehensive Income (OCI). This is the parking lot for gains and losses that haven’t yet hit profit. It’s like your retirement account: the value goes up and down, but you don’t include it in your household budget until you start drawing on it. In Hydro’s case, the big driver was asset revaluations. Of the $384 million uplift booked for dams and power stations, $222 million was sent straight to reserves. That gave the balance sheet a cosmetic boost, even though it didn’t put a dollar in Hydro’s pocket. More troubling was the $95 million in hedge losses parked in reserves, waiting to crystallise in 2025/26. Those losses are real cash flow risks, deferred rather than resolved. The revaluation may be larger and offer some comfort, but the hedging losses are the ones that bite when they finally fall due.
Put together, these three levels of profit explain why Hydro’s final bottom line result looks so much better than its reality. The core business was losing money. Financial engineering overall didn’t help. The bottom line was rescued by revaluing assets, with much of the uplift locked away in reserves. For a company that brands itself as the Battery of the Nation, the numbers suggest a year not of operational strength but of reliance on accounting mechanics. Hydro is keeping up appearances, but the underlying story is one of fragility: a business struggling to generate enough electricity to pay its way, while hoping for financial contracts and paper revaluations to present a surplus.
Understanding Hedge Contracts and Energy Price Derivatives
As already noted there are two kinds of hedge contracts in Hydro’s financial statements. This explains why some gains and losses appear in net profit, while others are held in other comprehensive income.
When Hydro uses hedge contracts that don’t qualify for special accounting treatment, or when the hedge isn’t very effective, the changes in value go straight to the profit and loss statement. That’s why they immediately affect net profit – they’re recorded now, regardless of whether any money has actually changed hands.
On the other hand, when Hydro uses a hedge that does qualify for special accounting treatment, the changes in value are held back in other comprehensive income until the actual electricity sales or purchases take place. Then, they’re transferred to net profits.
Think of it like managing your household finances: one hedge is like a bill you have to pay immediately – it affects your budget this week, whether you like it or not. The other is like saving money for a future bill – you’ve earmarked the funds, but it doesn’t show up in your weekly budget until the bill arrives. Hydro’s accounts work the same way: ineffective hedges affect profits now, while effective hedges are saved for later.
Breaking Down the Revenue Components
So, the parent company’s core profits were negative in 2024/25. Was this due to the drought? Hydro production in the previous year 2023/24 at 7,467 GWh was the lowest since the millennium drought years of 2008 and 2009 but underlying profit was $196 million, roughly the 5-year average as we’ve seen.
Or was it due to the high level of imports need to sustain us? Was this an expensive exercise? No, it wasn’t. Trading via Basslink (Inter Regional Revenues IRRs) was very profitable for Hydro in 2024/25. That’s something Hydro’s Annual Report didn’t crow about. Maybe because it might reveal the inner workings of a model under stress. But that’s what I’ll attempt to do, unpack the revenue to have a closer look at the components.
Hydro Tasmania’s parent company revenue in 2024/25 totalled $637.8 million. A closer look shows that the business is heavily concentrated. The vast majority – $603 million – came from selling electricity on the wholesale market. This highlights Hydro’s reliance on how much electricity it can generate and the prices in the wholesale market. A further $24.4 million was earned from services, likely through Entura, Hydro’s consulting arm that provides engineering and environmental expertise. Retail electricity sales contributed only $4.8 million, a small amount that probably reflects supply to the Bass Strait Islands rather than a significant retail presence. In other words, over 94 per cent of Hydro’s parent company revenue depends on wholesale electricity generation, making the business very vulnerable to changes in rainfall and market prices. It has only limited income from consulting and retail activities.
Hydro Tasmania’s parent company reported wholesale electricity revenue of $603 million in 2024/25 comprises various components. Accounting standards require that the statement of profit or loss presents income and expenses in sufficient detail to be useful to users, entities must disaggregate material items and cannot simply lump diverse amounts into a single line if that obscures their nature or function. However, implementation of the standard can be delayed for 3 years and Hydro has taken advantage of the letter rather than the spirit of the law to delay disclosure for as long as possible. Presenting Hydro’s wholesale electricity income as one figure is misleading.
Much of inter-regional revenues (IRRs) which totalled $180 million on a gross basis related to imports, although after allowing for link losses of around 5 per cent the net figure for IRRs (including exports) was probably closer to $171 million. The gross figure is from publicly available information from AEMO published by OTTER (The Office of the Tasmanian Economic Regulator). It’s one of the many annoyances one needs to endure with Hydro, having to trawl through other publicly available information to find what should be disclosed in its own reports. After all, $180 million of Inter Regional Revenue is a material amount. Readers have a right to know. Especially in the current circumstances where the ever-changing Basslink saga is difficult to follow at times.
Not only was IRR a significant revenue earner it was a substantial profit earner in a loss-making year. The likely fee paid by Hydro for the use of Basslink for 2024/25 was $67.2 million. This was the financial liability recorded at 30th June 2024 when the Network Service Agreement NSA with Basslink had one year to run. The 2024/25 financials also recorded a fair value gain following the termination of the NSA of $5.8 million so it’s quite likely the amount paid to Basslink for the right to IRRs was only $61.4 million. That means the net contribution to Hydro’s profits from IRRs may have been around $110 million. Who said the drought wasn’t profitable. The next one mightn’t be. That’s the problem I’ll come to a little later.
In a year of losses, a drought and a heavy reliance on imports the most surprising outcome was Basslink trading after the facility fee reaped net profits of $110 million. Which made the rest of the business look moribund. The downside is that the arrangement which enabled the profits ended on 30th June 2025.
Large-scale generation certificates (LGCs) also contributed an estimated $73 million, largely from power purchase agreements PPAs with WWF and Granville Harbour rather than Hydro’s own production, which fell below the LGC benchmark of 8,600 GWh which was set when the RET scheme was introduced in 1997. Forensic followers of electricity markets know this. What WWF and Granville Harbour wind farm produce can be discovered via AEMO. Not easily but it’s available. The Clean Energy Regulator can tell you LGC prices. But Hydro won’t disclose anything because it’s commercial in confidence. It’s a nonsense proposition designed keep us in the dark.
Frequency control ancillary services (FCAS) earned an estimated $17 million, the bulk of the $20 million in FCAS sales recorded by AEMO/OTTER for the year. FCAS are used by AEMO to stabilise the network.
Stripping these revenue components from the reported $603 million leaves roughly $342 million as the net wholesale electricity sales figure from NEM trading – a more appropriate measure of revenue from Hydro’s generation assets. This residual highlights just how exposed the parent company is to rainfall variability, with the bulk of its reported wholesale revenue padded by market mechanisms and certificate trading rather than direct electricity sales.
Wholesale Electricity Revenue: A Clearer Picture
To get a clearer view, let’s start with my estimate of Hydro’s net wholesale electricity sales of $342 million. Then, add the $30 million in the total of gains from energy derivatives. This brings the total to around $372 million attributable to wholesale electricity trading. This combined number captures both the revenue from selling electricity and the gains from all derivative contracts. It gives a more realistic picture of Hydro’s trading revenue than the headline $603 million, which includes revenue from other sources. Most readers trying to make sense of Hydro’s financials aren’t overly concerned whether hedging losses have impacted profits or are sitting in reserves waiting to do so. If the balance sheet is affected that’s all that matters. That’s why I included the hedging losses of $95 million. Accountants have rules which don’t formally recognise the losses in the P&L. They are held in reserves and will only affect profit when the electricity sales occur in future years.
So I’ll follow the rules which leaves a number of $467 million as Hydro’s wholesale trading revenue for 2024/25.
If Hydro had sold all its electricity at market prices in Tasmania (excluding what was exported which is already included in IRR), it would have made about $663 million. However, Hydro’s wholesale trading revenue came to only $467 million. The difference of almost $200 million shows how much of a discount Hydro provided to its customers, with financial settlements making up for the difference.
Basically, Hydro’s customers ‘bought’ electricity worth $663 million at market prices but paid much less due to agreements with Hydro. Hydro recorded only $467 million in wholesale trading revenue and needed financial gains to offset the lower prices.
That gap of almost $200m shows the effective discount Hydro gave its customers – the difference between spot prices and what customers paid.
Major users will always pay less than spot prices. But how much less is the question. At least if we understand the numbers we have a starting point for a discussion, a task which has been impossible given the secrecy which surrounds electricity prices for large users. It also gives a perspective of what Hydro sees every time a user puts up their hand for a favourable electricity price – a further erosion of profit margins which threatens to undermine its own existence.
While the $467 million figure captures Hydro’s wholesale trading outcome for 2024/25, it doesn’t tell the whole story as we’ve seen. There is $95 million of hedge losses sitting in other comprehensive income. These losses haven’t yet affected profit, but they will be when the electricity sales take place. In simple terms, Hydro has saved these losses for later, but they will reduce revenue in the future.
There are understandable reasons why the $200 million discount is a gross overstatement because no-one expects major users to ever pay spot prices, but the fact there are a further $95 million of unrealised losses waiting in the wings suggest a large effective discount is still likely.
Just as Hydro Tasmania offers large industrial customers discounted electricity through bespoke financial contracts – shielding them from volatile spot prices – it extends similar arrangements to its wholly owned retailer, Momentum Energy. While all electricity must be physically purchased through the National Electricity Market (NEM), Hydro provides Momentum with internal hedging contracts that fix or cap the price it pays, functioning like a discount card and insurance policy. These financial instruments are not physical energy transfers but contractual overlays that stabilise Momentum’s cost base. The $146 million of eliminations in Hydro’s segment reporting likely reflects the net effect of these wholesale hedging arrangements – booked as revenue by Momentum and expense by Hydro – and removed on consolidation to avoid double-counting. Given this, it’s quite plausible that Hydro effective discount in total to all customers is in the range of $200 million to $300 million.
To reiterate how these numbers were calculated
It’s important to note that the analysis above makes some adjustments to Hydro’s published figures. The $342 million net wholesale figure is calculated by removing inter-regional revenues IRRs, LGCs and FCAS, even though Hydro reports the full $603 million as wholesale sales. The $467 million trading benchmark adds back derivative gains but excludes the $95 million of hedge losses currently held in other comprehensive income. Also, the comparison to market prices uses averages and assumes that Hydro’s sales match its generation, which may not be entirely accurate. These changes don’t alter the overall connection to Hydro’s financial statements, but the analysis is more illustrative than a precise restatement of Hydro’s accounts.
Wholesale Revenue: A Summary
Hydro’s 2024/25 financial statements reveal a concerning picture once you look beyond the headline figures. Whether the parent company’s core trading revenue is $342 million, or $372 with all the hedge losses, or $467 million if the deferred hedge losses are excluded, the figure is well below the $663 million that spot market prices would have yielded, at best barely two-thirds of what they might have received.
For a government-owned company, this raises serious questions. Hydro’s Board and the responsible government ministers owe Tasmanians an explanation about the shaky nature of the parent company’s earnings, the reliance on financial trading, and the potential losses being held in reserve. The public deserves more than just positive profit figures – they deserve a clear understanding of how Hydro is really performing, what risks it’s carrying, and whether the business model is sustainable in the long term. Until this clarity is provided, the numbers will continue to look better on paper than they do in reality.
The Revaluation Story
The value of Hydro Tasmania’s generation assets isn’t fixed – it depends on expectations about the future: how much water will flow into the system and what electricity prices will be. Since 2020, Hydro has rated its system as capable of producing 8,900 GWh a year. But by the end of 2023/24, the 10‑year moving average inflows had slipped to 8,700 GWh, and in 2024/25 Hydro cut the rating again to 8,689 GWh. At a recent Parliamentary Estimates hearing, the CEO tried to calm fears of a doomsday drought scenario by saying Hydro was assuming inflows would shrink by about 2 per cent each year – roughly 17 GWh annually. Even with this scaling down, the book value of Hydro’s dams and power stations rose, which can only mean higher electricity prices were factored into the valuation.
This matters because asset values aren’t just accounting abstractions. They reflect future earnings and determine how much debt the business can carry to fund investment. Yet the inflows themselves have been weak recently: 6,700 GWh in 2024/25, following an even lower 6,200 GWh in 2023/24, pushing the 10‑year average further down. The Whole of State Business Case WoSBC planning baseline for Marinus was stated as 8,300 GWh, though it’s unclear whether that’s an average across the planning term or a fixed annual assumption.
The link between inflows and electricity production may be straightforward – more water means more generation – but the link between inflows and revenue is not. As inflows change, so does the mix of electricity sources. Run‑of‑the‑river generation must be sold immediately, much like solar and wind, and will face increasing competition as those sources expand. Medium‑term storages can smooth out seasonal rainfall, while long‑term storages such as Great Lake and Lake Gordon provide deeper reserves. All have different profit earning ability as we are constantly told when Marinus is being justified – our hydro storages are the source of future wealth.
But different inflow levels shift the balance between these three sources, which can cause disproportionate swings in both revenues and asset values. The challenges are many, while the publicly known solutions remain few – Hydro’s revaluation story is less about certainty and more about navigating a narrowing path between declining inflows and rising price assumptions. Or it is like our Premier is fond of saying – just another person’s opinion?
The Problems Ahead
Hydro’s financial position is affected not only by the discounts and losses already visible, but also by big changes in Tasmania’s electricity connection to the mainland. Basslink is now operated by its owner APA and now earns the revenue from inter-regional trading. For the last two years, Hydro has relied on this revenue, but with APA in charge, the reliability of those revenues is uncertain. The loss of this revenue will significantly hurt Hydro adding to the existing problems with its wholesale trading results.
The risks will increase from 1 July 2026, when Basslink will likely become a regulated asset. If it doesn’t there’ll be even more pain ahead. If regulation proceeds Hydro won’t automatically receive inter-regional revenue even though it might relate to electricity it has produced (it will only get the Tasmanian price) or electricity it may purchase via imports (again it will pay Tasmanian prices) ; instead, it will have to bid for it at auction. This introduces competition and raises the likelihood that Hydro – and Tasmanian consumers – will be worse off. What was once a stable source of income, and in 2024/25 an unexpected windfall, will become uncertain, affecting Hydro’s financial stability.
The discussion about how new connections will deliver large gains to Hydro overlooks the stark reality that for regulated assets inter regional revenues will accrue to AEMO. Should Hydro wish to gain the benefit of those IRRs it will have to bid at auction. There are sure to be other interested. And it will cost money.
The increase in provisions for legacy power purchase agreements (PPAs) with WWF and Granville also signals potential future cash flow problems. That liability is booked at $143 million at June 2025. That’s due to future contract prices being well above current market estimates. When Hydro on-sells LGCs it will make losses. These factors will weigh on the parent company’s earnings for years to come. The LGC scheme expires in 2030.
However, there’s also a potential positive change on the horizon. The replacement of LGCs with Renewable Energy Guarantee of Origin (REGOs) will allow Hydro to sell its renewable energy directly. This could increase profits, but it’s unclear how it will work.
Beyond Basslink lies Marinus. If the proposed second interconnector proceeds, the uncertainties increase. Two links would mean more complex electricity flows, more exposure to mainland market conditions, and greater reliance on financial trading to manage outcomes. It’s not just more loan funds needed for the large capex projects at Tarraleah and Cethana, but more working capital to operate in the new trading environment, not to mention the additional liability that may arise with PPAs needed to get new generation facilities across the line. The recent blow out in onerous contracts for LGCs is a reminder of the downside lurking just around the corner.
For Hydro, the challenge is not just managing rainfall but navigating a future where its connection revenues are no longer assured and where the costs of securing access to them may rise. For Tasmanians, the challenge is to demand transparency: to look beyond the profit figures and understand both the risks and the opportunities that policy changes may unlock.
But the stakes are bigger than Hydro alone. For close on a century, the assets of Hydro Tasmania have been the fiscal workhorse of the state, underwriting government services and cushioning budgets when other revenues faltered. That legacy is now under strain. Own‑source revenue has slumped to just 30 per cent of general government expenditure, well below the 37 per cent target set for 2032/33. The gap is not academic – it is the measure of Tasmania’s fiscal independence, and right now it is shrinking.
Alarmingly, the income tax equivalents and dividends from government businesses – once a reliable pillar of own‑source revenue – are at their lowest point in 2025/26. Strip away the Mersey Hospital ‘dividend’ from Tascorp, which is nothing more than a disguised drawdown of an eight‑year‑old federal grant, and the receipts from government businesses in 2025/26 collapse to just $141 million. Treasury’s forward estimates promise a miraculous rebound to $448 million by 2028/29, but that projection rests overwhelmingly on Hydro. By then, Hydro alone is expected to deliver $250 million of the total. In other words, the state’s fiscal hopes are being lashed to a single mast – one already battered by drought, derivatives, and debt.
The Marinus decision, backed by a WoSBC so heavily redacted it was barely readable, is somehow projected to deliver an extra $400 million on average into government coffers. We don’t even know whether that’s extra to what is in the current forward estimates or extra compared to the current extremely low figures. We simply do not know. After a closer inspection of Hydro, the question screaming from the rooftops is HOW. How is any of this going to happen?
Rather than clarity, the government continues to build a firebreak around all its operations – a wall of obfuscation that prevents any meaningful understanding of what is really happening. Instead of transparency, Tasmanians are handed blacked‑out documents and hollow assurances, while the fiscal stakes climb higher.
Nothing heard at Estimates hearings this week gave any confidence that the government or Hydro’s leadership has a credible plan to turn the tide. Instead, we see a company unsteady after losses from core activities, encumbered by onerous contracts worth $143 million, energy price derivatives under water by $157 million and looming capital expenditure challenges at Cethana and Tarraleah. Add to that the uncertainty of acquiring the IRRs once Basslink becomes a regulated asset in 2026, and the risks of power purchase agreements for new generation facilities that may well cannibalise some of Hydro’s profits. Each of these is a live grenade in Hydro’s balance sheet, waiting to detonate.
The challenges are daunting. The answers so far few. Tasmanians deserve more than vague assurances and glossy rhetoric. They deserve candour about the risks, honesty about the costs, and a clear‑eyed plan for how Hydro will continue to serve the public interest rather than drift into deeper uncertainty. Without that, the century‑old bargain that assumes Hydro’s assets would safeguard the state’s finances, may be broken, and the consequences will be borne not by the boardroom but by every Tasmanian household.