Legislative Council, Thursday 8 August 2024

Ms FORREST question to MINISTER for ENERGY and RENEWABLES, Mr DUIGAN

You informed the House on Tuesday that the Marinus Link final investment decision (FID) is now to be taken in May 2025. I understand that the Australian Energy Regulator Resolution on the cost recovery split, the pricing impact for customers between Tasmania and Victoria, is scheduled to be finalised in April 2030.

I hope to be corrected on this if I am wrong. I expect this reality will also impact the integrity of the whole of state business case for Marinus Link scheduled to be tabled before the FID, as confirmed by you on Tuesday. The worst-case scenario for the cost recovery split would see Tasmanian customers paying 50 per cent of the annual charges, and the best case is probably around 10 per cent to 15 per cent. We do not know what that is yet though. We will not know that outcome at the time the final investment decision is taken.

My question is, do you believe the Tasmanian Government should enter into urgent negotiations with the federal government to agree on an appropriate price cap on electricity price impacts before the FID is signed off in May 2025? If you do, will you commit to actively promoting or participating in such negotiations?

ANSWER

Mr President, I thank the member for the question. I point to the Tasmanian state government engaging in a whole of state business case to fully understand the impacts of the Marinus Link project to the State of Tasmania. That piece of work is being led by Treasury. That will be critical to informing our decision on price impacts and the cost of this project to Tasmanians. We would have a role to play in providing some information into that project and into that process. I would happily agree to play whatever part I am able to.

Supplementary Question

Ms FORREST - Mr President, I appreciate the minister's initial response there. The question related more to the fact that there is a quite a delay between the IER resolution and the FID and the whole of government business case that has to be done before that information is available. The question was, do you believe you should be negotiating with the federal government on some sort of price capping or agreement on what energy prices look like in that interim period?

Mr DUIGAN - If I understand your question, you are seeking the Tasmanian government to go to the federal government to seek an energy price cap?

Ms Forrest - Some surety on energy prices for Tasmanians during that period with great uncertainty about what our prices will be.

Mr DUIGAN - In terms of modelling that would feed into our whole-of-state business case, I imagine we would understand and feed in a number of scenarios that would give us an idea of what the impacts would be at various levels of price and cost allocation. Is that the point that you are trying to get to?

Ms Forrest - Yes, will all those scenarios be modelled and reported on?

Mr DUIGAN - As I say, that is work that has been led by Treasury, not through my department. I fully expect they would acknowledge and understand if there are any vagaries in the number they are feeding into that model, that they would need to model various scenarios through that process.

Ms Forrest - I will ask the Treasurer.