Energy prices Tasmania: Renewable Energy Dividend to shave hundreds off bills, but only when Hydro Tasmania turns profit
A new policy would see each of Tasmania’s 254,000 households receive an energy bill rebate worth potentially hundreds – but only on years when a state-owned utility turns a healthy profit.
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The state government has revealed more details about a new policy that would see each of Tasmania’s approximately 254,000 households save hundreds on their power bills – but only on years a state-owned utility turns a healthy profit.
First canvassed in Premier Jeremy Rockliff’s State of the State Address in February, the Renewable Energy Dividend (RED), part of the state government’s new Tasmania First Energy Guarantee, will make its first payment this financial year.
The dividend, which is tied to the financial performance of Hydro Tasmania, would save households “millions” in total – but only on years when the utility turns a profit of greater than $100m.
This has occurred in five of the last 10 financial years, according to government figures. In FY 2022, the last financial year for which data is publicly available, Hydro recorded an underlying profit of $149m. The financial year prior, it was $217m.
Under the policy, 50 per cent of any profit over $100m would be ringfenced for the RED, while the remainder of the profits would be retained by the state government to spend on health, education and housing.
“The RED scheme means when Hydro makes money, Tasmanians save money,” Mr Rockliff said.
“Just like shareholders receive a dividend when a business is making a profit, Tasmanians will now directly share in Hydro’s profits, and the benefits will expand as future energy projects come online.
“Under the RED scheme, every year that Hydro returns dividends in excess of $100m, Tasmanians will directly share in it. This is an innovative cost of living measure that will help every single Tasmanian household with their energy bills.
“The Renewable Energy Dividend will appear as a financial credit on their bill, which means they will pay less, and save more.”
Deputy Premier Michael Ferguson said that households would likely receive their first dividend at the start of next year, with the start of each calendar year set to be the nominated date of the dividend’s annual payout on years it is applicable.
The quantum of dividend payable, should there be one, will be known in October, when Hydro’s FY23 annual report is released.
As an illustration of the proposal, Mr Ferguson said that, were Hydro to deliver a dividend to the state government of $160m, each household in the state would receive about $100 off their energy bill.
“Currently, Hydro returns between 70 to 90 per cent of its profits to the state government, which are then used in the ordinary operations of the government, including on essential services such as health and education,” Mr Ferguson said.
The first action announced as part of the Tasmania First Energy Guarantee policy is a rethink of the state government’s oft-touted Marinus Link electricity cable to the mainland amid the project’s ballooning price tag.
The Mercury understands that the estimated cost of the project has soared from $3.1bn to closer to $5.5bn.
With Tasmania set to foot one-third of the bill, the project needs to be put on a more sustainable footing, Mr Rockliff previously said.
“There is a line in the sand that Tasmania cannot afford to cross and I will not be crossing it,” he said.
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Originally published as Energy prices Tasmania: Renewable Energy Dividend to shave hundreds off bills, but only when Hydro Tasmania turns profit
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