Jon Mayson
Tauranga
TECT cheque important
The key question as to why it is considered necessary to change TECT into a wholly charitable trust remains unanswered.
Thus far the trustees have tabled nothing more than what is a series of concerns relating to Trustpower and the wider electricity industry. These concerns are commercial matters that should be addressed as part of the day to day management of TECT.
There has been much comment on the adequacy of the trustees' proposed offer of a series of payments totalling $4300 per TECT consumer.
The present trust deed provides that on expiry, 1-January-2072, TECT is to be wound up and the proceeds distributed to the beneficiaries (TECT consumers).
Accordingly, this is a further component of value to be taken into account by TECT consumers in making their decision. It is not simply a case of the remaining 55 annual payments.
From reading various letters to the press, it is apparent that many TECT consumers place reliance on their annual TECT cheque. They may pay a little more for their Trustpower electricity but the arrangement represents a form of saving that would otherwise not take place.
In a country that posted an annual household savings rate of -2.8% for 2017 the TECT cheque may be more important than many realise.
Bill Toxward
Tauranga
TECT proposal a good move
The current debate about the proposed TECT restructure is generating much heat but not much light.
The current TECT trustees are to be congratulated for having the guts to stand up for the benefit of the local Trustpower consumers, for too long the value of the TECT cheque has, in my view, been taken away by electricity charges levied by Trustpower.
I want to support Trustpower, they are local, and they generate electricity sustainably, but they are not entitled to most of the value of the TECT cheque, that $28 million paid recently should have stayed in our community.
The current proposal looks a much better deal for the community and a fair deal for consumers when we realise that the TECT cheque we have been receiving is, in fact, worth just a fraction of its face value, the lump sum compensation then seems much more appealing. (Abridged)
David Riley
Tauranga
Letter to the editor:
Do not approve plan
I strongly support and endorse most of what DL Gibbs (Letters, February 10 &17) has to say on the TECT wind up proposal as the figures and assessments of the position pretty well equate with mine.
If a replacement charitable trust is formed, who will be the trustees, how will the trustees be elected, and more importantly who controls what community/charity projects are funded. In other words, who controls the minders?
By my calculation, each TECT beneficiary's interest is worth approximately $12,000 so why would anyone accept $2500 cash plus smaller annual payouts for five years and in return lose control of all the assets on an 80/20 split. It really is a no-brainer, so the answer is don't approve this nonsense because it looks to me to be nothing more than an attempt to embark on spending up large on all the "nice to haves" unimpeded and unrestrained and outside the public spotlight.
(Abridged)
S. Paterson
Mount Maunganui
An alternative proposal
With a new TECT proposal why not remove the TECT Charitable Trust off of a revised trust deed deleting it as a consumer beneficiary, pay a little more tax and distribute the extra $100 to Trustpower consumers. After seven years this would equal the amount offered in the six-year proposed evolution, and you are still a beneficiary under the trust, or just leave as is and save the trust a lot of money from the court and legal costs while retaining the corpus of the trust.
David Mends
Te Puke
A question
One of the PR failings of the TECT proposal is that there is only one option, this many see as a sweetener, with it already having a negative effect on Trustpower's shares and integrity.
To date, there has been no mention of TECT's shareholdings in (Australian) Tilt Renewal, shares from the split in the original Trustpower shares, which effectively have not been affected even though they did account for approximately 25 per cent of TECT's share capital at the time of offer.
Can someone explain why can't TECT sell off its Tilt shares (and possibly some Trustpower shares) to achieve their objective and not adversely affect our local Trustpower business?
As to TECT's reason that they are unsure of what lies ahead in the NZ Electricity/Energy industry, does TECT know what lies ahead for Tilt and how Trustpower could negatively affect Tilt with its progressive and flexible future planning?
(Abridged)
David
Holland
Papamoa
Good idea
Has your correspondent Mr Toxward either read the TECT Trust Deed or attended one of TECT's public meetings? All his arguments (Letter, February 24) are fundamentally wrong, in my view.
In criticising the trustees' commentary on their proposal, he misrepresents the fiduciary duty of the trustees. Clause E of the Trust Deed preamble states (my emphasis): "The benefits which the Trustees derive through their ownership of the assets of the Trust Fund will be made available directly or indirectly as the Trustees in their discretion decide to Consumers." So the Trustees already can decide that the beneficiaries' interests might be best met by distribution only to eligible community groups rather than to individual consumers. There is no power-grab going on here.
Nor is it likely there'll be much of a shift in shareholder value. At the meeting I attended, a clear undertaking was given that the present Trustees have no intention of lowering their 26 per cent holding in Trustpower. All they want is to distribute the full amount of the earnings of their assets (which of course, and prudently, include other shareholdings as well) to community groups.
Dividing that revenue to offer a windfall cheque to individual consumers every year significantly diminishes the amount of community good TECT's money can do. I'm voting yes.
Beth Bowden
Tauranga
A great proposal
The primary beneficiaries of the TECT cheque are Trustpower shareholders. That is why the share price fell by over 5 per cent when the TECT proposal became public.
Making Trustpower consumers the only beneficiaries of the TECT cheque gave Trustpower a market advantage, in my view. That is why they have a 69 per cent market share locally which is the highest in the land by a country mile. It is also why, according to analysts reports, all consumers in this region pay inflated electricity prices of around $500 a year more than other regions. This is around the amount of the TECT cheque for the average consumer.
The TECT cheque is an illusory benefit to Trustpower consumers unless they are also Trustpower shareholders.
Other power companies have been content to sit back and not target more market share because they can still charge their local customers more than anywhere else in the country as a result of this market distortion. So who are Trustpower trying to fool with their slick campaign? This is not about keeping the TECT cheque. This, in my view, is about Trustpower preserving monopoly pricing power. It's basic economics. Good on the TECT trustees for supporting competition in the local electricity market which will benefit all consumers. This is a great proposal - lower power prices for all plus the return of community originated assets to community purposes.
Marcus Wilkins
Tauranga
