Electricity bill relief payments for Tasmanians set to be mostly negated by price rises
Tasmanian electricity customers are receiving some power bill relief in the form of a state government one-off $60 payment — but it will arrive just as power prices are set to rise.
Every year, the state-owned power company Hydro Tasmania makes a dividend payment from its profits to the Tasmanian government.
Any year that dividend is larger than $90 million, a share of the money above that limit is then paid to Tasmanian taxpayers.
The most recent dividend to the government was $122 million, so Tasmanian energy customers will each get a one-off $60 payment credited to their electricity accounts, starting this month.
Spruiking the payments, Premier Jeremy Rockliff said paying power bills had been challenging for all Tasmanian households and they should be able to share in the benefits when Hydro was doing well.
While households will no doubt welcome the $60, in a few weeks electricity prices are set to go up by about 2 per cent, which would mean most of the one-off payment is used to cover the increase.
The Tasmanian Economic Regulator said this week that residential bills for average customers will grow by about $49 per year, in the coming financial year.
Annual bills for small businesses will increase by between $11 and $159, depending on usage and the type of tariff.
Marc White, from Goanna Energy Consulting, said the $60 payments were a good thing for households.
"We're very lucky to get that dividend, certainly Hydro's profit and loss is going to be under pressure this year with the very low inflows and the requirement to run the Tamar Valley Power Station," he said.
"It's a positive for the community and this financial year will be a bit tougher."
Mr White said the "reasonable" 2.13 per cent power price increase for 2025-26 is largely driven by increased network costs, which are only set to grow.
"The TasNetworks costs regulated by the Australian Energy Regulator are set to increase substantially over the coming years, but fortunately for this determination, Hydro Tasmania energy costs have come down to offset those network costs," he said.
Mr White said the ongoing transition to renewable energy around the country would mean substantial bill increases in the years ahead.
"All states are facing these massive investments in the transmission network to get the new renewable energy to where it needs to go and Tasmania is not immune from some of those investments," he said.
"In the transition, you're paying for both sets of assets — you're paying for existing assets and your building new assets and that's the expensive part of the process — so we're expecting a bumpy ride as we transition to renewables."
Mr White said in the long term, the hope was that electricity would become cheaper than it would have been without a transition to renewable energy.
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