Upper South Island grid upgrade to cost $66m

Upgrading the upper South Island's power grid will cost $66 million, but how much of that the region's electricity users will have to stump up for is unclear.

National grid operator Transpower is seeking approval from the Electricity Commission to complete a range of projects on its network worth $158 million across the country.

Five upgrades have been flagged for the Nelson-Marlborough region, including the installation of more circuits on the 110 kilovolt (KV) transmission towers between Blenheim and Stoke at a cost of $20.2 million.

The towers are currently strung up on one side only and transport energy from the Cobb hydro station west of Nelson as well as from southern generation stations.

Transpower communications manager Chris Roberts said the national grid upgrade would have a "small impact" on the transmission charges consumers paid as part of their power bills.

The Electricity Commission has to decide which of the projects flagged by Transpower are in the national interest and which are of more benefit to particular regions only.

The regulatory body will then determine a pricing structure that will allow Transpower to recover the cost of its investment through its transmission charges on a national or regional basis.

What category the top of the south upgrades fit into was not yet clear, Mr Roberts said.

However, he said any increase in transmission charges would be spread out over many years to minimise the impact on power bills.

Marlborough's upgrade is among the most expensive of the 30 projects Transpower says are required to address short term problems with the national grid.

Growing demand for power in the region means extra lines are required to import more electricity into the area.

Moves are also afoot to increase the region's generation capacity.

Retailer and generator TrustPower is expecting to file resource consents soon for its $240 million Wairau River hydro scheme.

TrustPower spokesman Graeme Purches said while the transmission upgrades were necessary, building generation close to where demand existed was also sensible.

- NZPA