Government cash-cow Transpower is promising to give higher-than-targeted returns to customers over three years through lower prices.
The state-owned operator of the national transmission grid yesterday posted a surplus before tax of $155 million on sales revenue of $555.5 million ($551.4 million the previous year) for the year to June 30.
Transpower
declared a final dividend to the Government of $42.4 million.
That gives a total of $82.7 million in dividends to the Government, or a 75 per cent after-tax distribution, not including an asset revaluation.
Transpower revalued its assets up $54 million, increasing its after-tax bottomline profit to $164.35 million. The year before it had devalued assets by $14.11 million.
Transpower had a positive cash flow from operations of $208 million. Its assets stand at $2.32 billion, of which $974.62 million is equity.
Transpower's pricing method is the source of considerable dispute in the industry.
The biggest unresolved dispute is with another state-owned enterprise, Meridian Energy, which has withheld $65 million in charges from Transpower.
General manager corporate services Ian Niven said yesterday: "No one's got any intention of keeping gains past the allowable returns.
"And you might say why didn't you price down, but then you can't perfectly predict things like revaluation, because that $54 million is a consequence mainly of exchange rate movements which weren't under our control.
"These are the kind of gains we usually pass right back through to the customer ... but they don't impact on raising prices."
Mr Niven said these gains were returned to the customer over a relatively short term, "currently running at a three-year period."
Transpower revalued every year in accordance with a replacement cost method adjusted for depreciation.
- NZPA
