Legislative Council, Wednesday 22 March 2023

Ms FORREST asked the Leader of the Government in the Legislative Council, Mrs Hiscutt  

With regard to the new network service agreement between Hydro Tasmania and Basslink and noting the specific details of the agreement are not being sought in these questions:

Question 1:

How does the new network service agreement between Basslink and Hydro Tasmania differ from the abandoned agreement?

Answer:

The Network Services Agreement (NSA) is a commercial contract and its detailed terms are confidential.

That agreement commenced on midnight of 20 October 2022 and will conclude on the earlier of:

1. regulation of Basslink by the AER; and
2. 30 June 2025; unless extended by the parties.

It was preceded by a short-term agreement with BPL’s receivers on similar terms which ran from 1 October 2022 until the sale completed on 20 October 2022.

The new agreement includes the following obligations which are similar to those under the previous BSA:

• BPL is obliged to make Basslink available to the market at zero price, unless otherwise instructed by Hydro Tasmania.
• Hydro Tasmania may only instruct BPL to bid at a price other than zero in pre-agreed circumstances which apply when certain constraints bind.
• If Hydro Tasmania uses those bidding rights, Hydro Tasmania is obliged to publish a notice on its website advising the reason.

The detailed commercial terms in the agreement which support these elements were negotiated at arm’s length between Hydro Tasmania and APA (as the prospective purchaser of BPL.)  These differ in certain respects from the BSA, however the details are confidential.

Question 2:

Under the previous agreement any interregional revenue was paid to Hydro Tasmania in exchange for a monthly fee, is the new arrangement similar?

Answer:

Yes, the NSA incorporates a similar mechanism.

Question 3:

Regarding the commercial risk sharing payment under the previous agreement, does a similar arrangement apply?

Answer:

No the NSA does not contain a commercial risk sharing payment mechanism as per the BSA.

Question 4:

Regarding the availability adjustment factor which allowed Hydro Tasmania to discount the fee for periods when the cable wasn’t working, does this or a similar arrangement apply under the new agreement?

Answer:

The fee paid by Hydro Tasmania under the NSA to BPL has regard to the availability of Basslink, however the impact of unavailability on the fee under the NSA is different to what the impact would have been under the BSA.