Mr BARRETT - 2015-11-18
Gas and energy security seems to be something everybody is very concerned about. Can you please outline for us how the NEGI will benefit gas security for Territory businesses and consumers?
ANSWER
Madam Speaker, I thank the member for Blain for that fantastic question. Before I get to the heart of the question, I need to give people a bit of history. When we came to government three-and-a-half years ago, as the Chief Minister mentioned, the Territory was pretty well bankrupt. We had record debt projections, we had record deficits and we received a downgrade in our credit rating because of the 11 years of financial mismanagement by the previous government. Part of Moody’s downgrade was because the Power and Water Corporation had been left to deteriorate and had become a financial basket case. That is one of the reasons we have done so much reform in the area of utilities, trying to fix up the Labor mess.
Part of the reason the PWC was a financial basket case was the gas sales agreement the previous government signed up to with Blacktip. I have to be very careful not to cross the line and start talking about commercial-in-confidence information. Whilst the price of that gas looked very good on paper, the quantities of gas were far in excess of the requirements of the Power and Water Corporation, to the point where Power and Water has been paying, for years, for gas it never has and never will use. It has bought far more gas than it needs for the electricity supply to Territorians and Territory businesses.
Because Power and Water is paying money for this gas, our electricity costs are artificially inflated, in part due to the arrangement the previous Labor government put in place. The announcement this week by the Chief Minister in relation to the Tennant Creek to Mount Isa pipeline, the NEGI, gives the Power and Water Corporation the ability to sell not all of this excess gas, but a large portion of it.
The Power and Water Corporation yesterday signed an agreement with Incitec Pivot to supply gas to it for 10 years, which relieves an enormous burden on the Power and Water Corporation. Together with the reforms we have put in place in relation to structural separation and the implementation of market reforms, this fantastic NEGI agreement the Chief Minister has put in place will deliver tariff reductions to Territorians and businesses.
Madam SPEAKER: Minister, your time has expired.
Mr ELFERINK (Leader of Government Business): Madam Speaker, I ask that further questions be placed on the Written Question Paper.
ANSWER
Madam Speaker, I thank the member for Blain for that fantastic question. Before I get to the heart of the question, I need to give people a bit of history. When we came to government three-and-a-half years ago, as the Chief Minister mentioned, the Territory was pretty well bankrupt. We had record debt projections, we had record deficits and we received a downgrade in our credit rating because of the 11 years of financial mismanagement by the previous government. Part of Moody’s downgrade was because the Power and Water Corporation had been left to deteriorate and had become a financial basket case. That is one of the reasons we have done so much reform in the area of utilities, trying to fix up the Labor mess.
Part of the reason the PWC was a financial basket case was the gas sales agreement the previous government signed up to with Blacktip. I have to be very careful not to cross the line and start talking about commercial-in-confidence information. Whilst the price of that gas looked very good on paper, the quantities of gas were far in excess of the requirements of the Power and Water Corporation, to the point where Power and Water has been paying, for years, for gas it never has and never will use. It has bought far more gas than it needs for the electricity supply to Territorians and Territory businesses.
Because Power and Water is paying money for this gas, our electricity costs are artificially inflated, in part due to the arrangement the previous Labor government put in place. The announcement this week by the Chief Minister in relation to the Tennant Creek to Mount Isa pipeline, the NEGI, gives the Power and Water Corporation the ability to sell not all of this excess gas, but a large portion of it.
The Power and Water Corporation yesterday signed an agreement with Incitec Pivot to supply gas to it for 10 years, which relieves an enormous burden on the Power and Water Corporation. Together with the reforms we have put in place in relation to structural separation and the implementation of market reforms, this fantastic NEGI agreement the Chief Minister has put in place will deliver tariff reductions to Territorians and businesses.
Madam SPEAKER: Minister, your time has expired.
Mr ELFERINK (Leader of Government Business): Madam Speaker, I ask that further questions be placed on the Written Question Paper.
Last updated: 09 Aug 2016