CONSUMERS in Tasmania and Victoria are likely to be stung $40 million a year to pay for Basslink. Each state would pay $20 million a year.
It would appear on electricity bills as a transmission cost.
Industry insiders say this is the probable scenario if Basslink becomes regulated.
Tasmanian Energy Minister David Llewellyn last week revealed in Budget Estimates that he had asked Hydro Tasmania to investigate regulation of Basslink.
This would cap revenue and reduce the Hydro's exposure to a variable national market.
However National Grid, which owns Basslink, said it was not interested in converting to a regulated link.
National Grid spokesman Jon Richards said he was happy with Basslink arrangements.
"We have no plans to do so, that's a flat no," he said.
Mr Richards said neither the Hydro nor the Tasmanian Government had approached National Grid about regulating Basslink.
Insiders said the annual $92 million facility fee, or line rental, paid by Hydro Tasmania for use of Basslink could be split up if it converted to a regulated link.
The Hydro would keep about $52 million of the annual debt while Tasmanian and Victorian electricity users would pay the remaining $40 million a year in transmission costs.
This would free up some Hydro debt and enable it to service a billowing capital-expenditure program.
Basslink is the only unregulated link in the national electricity market.
Safe harbour provisions in the National Electricity Code allow for unregulated players to convert.
The conversion would depend on Basslink satisfying a regulatory test based on market value and public benefit.
The option to convert to a regulated link was raised in leaked internal Hydro documents.
The documents say conversion would reduce the facility fee "as Victorian and Tasmanian consumers will pay some of the cost" but warn it would be "very politically sensitive and only worth doing if it de-risks Hydro".
The regulated link option comes in the lead-up to the Victorian state election in November.
Any added burden on Victorian consumers for Basslink could upset re-election chances of Labor Premier Steve Bracks.
Basslink Concerned Citizens Coalition condemned the proposal to convert Basslink.
"It is outrageous that Victorian consumers are likely to be made to pay directly for the Tasmanian Government's bad financial planning," said coalition chairman Keith Borthwick.
He said the Tasmanian Government was trying to "dig itself out of the hole".
Mr Borthwick called on the Australian Energy Regulator to re-visit the application made by the Tasmanian Government to the ACCC in November 2001 when changes to the Electricity Code were authorised to enable Tasmania's entry to the national market.
"It was clear then that the only way the case for Basslink would get up would be if it was unregulated," he said. "We look forward to hearing the Government's explanation of what has since changed."
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