Transmission income boosts Transpower profits to $135m

Photo / Mark Mitchell.

State-owned national grid operator Transpower has lifted its annual profit, partly on a rise in transmission revenue.

The surplus after tax and before net changes in fair value for the year ended June 30 was $135.8 million, compared with a surplus of $107.7 million last year, Transpower said yesterday.

The main reasons for the rise in profit, were an increase in transmission revenue and a lower impairment charge on system operator assets.

Transpower chairman Wayne Brown said the profit was lower than forecast due to unforeseen HVDC reserve charges of $27.5 million, which exceeded the level allowed for under a Commerce Commission settlement.

"These charges are largely beyond our control and are attributed to us as owner of the HVDC interisland link. However, given the substantial investment programme ahead, it is unfortunate to experience a lower than forecast profit," he said.

About 60 projects were under way, including four major upgrade projects, representing investments of more than $2 billion in the next three years.

Brown said the increase in transmission revenue this year reflected the significant progress made in advancing necessary investment in the grid.

"Given the need to fund the extensive capital works programme, no dividend will be paid to the Government this year," Brown said.

As well as the major build programme under way, incorporating new generation technologies, such as wind, and meeting more exacting customer quality requirements were being addressed.

New technology platforms had been invested in that would allow more intelligent operation of the transmission grid.

Completion of a $70 million market systems project, a major upgrade to the software and hardware supporting the electricity market and system operation functions, was a major milestone achieved this year.

Substantial strides were also made towards completion of the telecommunications and networks programme, a $150 million rebuilding of the communications system to nationwide substations.

- NZPA