Transpower blames settlement for profit drop

By CHRIS DANIELS, energy writer

Transpower, the state-owned enterprise that owns, operates and maintains the national electricity grid, has announced an after-tax profit of $23.25 million for the year to June 30, down from $144.5 million the previous year.

It will pay its Government shareholder a dividend of $38.5 million, down from last year's $80.2 million payout.

Transpower said the profit drop was mainly due to the one-off impact last year of a settlement with fellow SOE Meridian over disputed transmission charges.

Its annual revaluation process meant a $33.2 million drop in the value of Transpower's assets, which are now valued at $2,136.2 million. The year before its assets climbed in value by $54.3 million.

During the year, Transpower increased its capital expenditure by $14.6 million, taking its total capital spending up to $104 million.

Chairman Sir Colin Maiden said "substantial new investment" was needed in the "ageing" national grid.

He said the next few years would be crucial in determining the success of that investment, but warned that the company faced serious regulatory hurdles.

The Resource Management Act was a particular problem. Transpower already faced difficulties in routine maintenance because of the act and "these difficulties will become more pronounced as Transpower embarks on significant investment in the grid".

The company wants the Government to introduce mechanisms allowing national benefits to be weighed against local issues in RMA applications.

Sir Colin said Transpower supported the establishment of the Government's Electricity Commission and believed the new regulatory environment provided the opportunity for "much-needed certainty and clarity of accountabilities for the company and other industry participants".