Contact brushes off farmer's attack

Grant King says Contact has to pursue individual power projects. Photo / Getty Images

Contact Energy has brushed off an attack on "disgraceful" behaviour over its planned Waikato wind farm plan, saying it has to pursue individual projects.

At the annual meeting in Wellington, Contact chairman Grant King said projects such as the $1 billion Hauauru ma raki wind farm near Raglan were needed to maintain a safe, reliable energy supply.

"That means companies like Contact do need to pursue individual projects. We know people do have deep attachments to the land and that clearly creates a cause for concern," King said.

Unlike last year's shambolic meeting, during which the company came under fire for a director fees rise, yesterday's gathering was sedate.

The main criticism came in a letter read to the meeting from shareholder David Walter, a landowner near the wind farm, who accused the company of "extreme incompetence".

He said Contact had a culture of riding roughshod over the New Zealand public.

"Your ham-fisted process has generated huge uncertainty and angst for the local landowners impacted by your plans."

The company had reversed its stand on the need for an urgent hearing on the project, asking for a 12-month delay.

"You then picked off a couple of landowners who looked to be problematic, buying their land ... [and] came to the rest of us with a huge wodge of material that only lawyers could penetrate and a truncated timeframe."

Having made the Government and "west coast community jump to your tune", the company showed extreme incompetence by not being prepared for the board of inquiry.

"The behaviour of this organisation is disgraceful," Walter said.

The company has given no commitment to the timing of the project.

King said all projects had come under review over the past 12 months. "Clearly we're going to be remarkably challenged in the coming years. We have deferred some projects. I'm sure that's why [there is] a change in priorities for the projects."

On the outlook for the coming year, King said economic conditions were expected to continue to dampen demand growth, and market and operating uncertainties remained. "In this context, the board considered it would not be prudent to provide quantitative guidance for the 2010 full-year financial performance."

King also said keeping dividends at the levels of previous years depended on restoring profitability to more normal levels.

He said Contact had the best generation options of all NZ generators which it could develop as market conditions allowed.

Managing director David Baldwin said three projects, valued at $600 million, in advanced stages of development would restore Contact's operational flexibility.

They were the $250 million Stratford gas-fired fast-start peaking power station, a $250 million underground natural gas storage facility at Ahuroa, and Taupo's $100 million Tauhara geothermal power station.

Contact had been injecting 40 terajoules of gas daily into the reservoir at Ahuroa, and a drilling rig arriving at the site yesterday would drill three new injection wells, Baldwin said.

Further into the future, new sources of electricity generation would be needed to meet growing demand.

In the year to June Contact had a 31 per cent fall in underlying earnings to $160.6 million. It blamed a loss of flexibility and increased costs of its gas supply portfolio, worsened by electricity transmission constraints, and weather extremes.

Contact shares closed down 8c at $6.19.