One of the country's largest electricity and gas distributors says it is considering the longer-term effects of the Government's emissions reduction plan on its business after reporting a $44.55 million profit for the March year.
Powerco highlights regulation issues, emissions targets in profit result
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Powerco manages gas and electricity networks in the central and lower North Island. Photo / Bevan Conley
In its November submission on the discussion document Powerco said it supported the objectives to achieve a net-zero carbon economy for New Zealand by 2050 but said regulatory frameworks will need to adjust and improve to encourage investment.
"Much of our regulatory framework is designed to ensure 'just in time' delivery of infrastructure, and our perspective is that a continuation of this approach may result in networks being a constraint on decarbonisation efforts by customers and electricity suppliers.
"We also see the potential for underfunded industry participants to struggle to meet the very material investment demands that will come with electrification."
On the specific topic of ending new fossil gas connections, Powerco said it shouldn't be looked at in isolation from the energy system as a whole.
"If it is, we think there are better policy options to decarbonise gas demand than banning connections or fuels."
One example would be applying an emissions rating approach to new dwellings over time to capture all emissions, the company said.
Powerco, which is owned by Australian fund Queensland Investment Corp and AMP, reported net profit after tax of $44.55 million for the year to March 31, up from $4.77m in 2021 when bottom line profit was hit by losses on financial instruments.
Total revenue was $475.4m, compared to $446.8m the previous year.
Powerco has significant debt issuance, including $425m of wholesale bonds and more than a billion dollars of private placement notes in New Zealand and the US.