Negotiations between Hydro Tasmania and the owners of the Tasmanian Gas Pipeline over future access arrangements have progressed.

While negotiations between the parties remain constructive, and will continue, Hydro Tasmania has today referred the matter for arbitration, in case an agreement cannot be reached before the current contracts expire.

Hydro Tasmania is determined to get a fair and reasonable arrangement for Tasmanians, and continues to negotiate in good faith. Ongoing commercial negotiations and the arbitration process can proceed concurrently.

The arbitration application has been lodged with the Australian Energy Regulator.

Taking this step now gives wholesale gas customers certainty that new arrangements will be in place (whether by negotiated outcome or arbitration) before existing contracts expire. Hydro Tasmania will keep engaging closely with wholesale gas customers to keep them updated on progress.

If required, the purpose of arbitration would be to create the sort of outcome you’d expect in a market where ‘workable competition’ exists.

Current gas market reforms were initiated by the COAG Energy Council, after an ACCC report found an imbalance in the bargaining power of pipeline operators and shippers. The Gas Market Reform Group, headed by Dr Michael Vertigan, has recommended steps to strengthen the bargaining power of shippers.

Having applied for arbitration, Hydro Tasmania is constrained in its ability to provide further commentary or interview on these matters.

Neither ongoing negotiations, nor a potential arbitration process, affect Tasmania’s energy security or security of gas supply. Current gas market reforms allow an arbitrator to make an interim determination to ensure continuity of supply.

Ends.

Released for Hydro Tasmania by Rowan Dix, (03) 62305330 / 0409 722359 / media@hydro.com.au.