Transpower ordered to think again

Transpower has been told to go back to the drawing board and think again about ways of upgrading the power supply into Auckland.

The Electricity Commission said yesterday that an investment of $140 million in the existing network - and perhaps the construction of new power stations near Auckland - would delay the need for the planned 400kV line at least until 2017.

That delay would also save the country as much as $250 million.

The rejection of the plan has yet to be put to the public for consultation before it is finalised in July. However, if it is upheld, Transpower will have to come up with a new plan or challenge the commission in the courts.

Electricity Commission chairman Roy Hemmingway said: "Based on a wide range of advice and analysis to date there are alternatives that provide the same level of electricity security but are less expensive than the proposed line.

"We are postponing the inevitable, but being able to postpone that inevitable has enormous financial benefit to the country. We do not build infrastructure so far in advance of need that it costs hundreds of millions that we do not need to spend now."

The commission has also called for submissions on the desirability and practicality of acquiring a corridor of land for the power line.

Disappointed Transpower chief executive Ralph Craven said the 400kV line provided a sensible, economic, reliable and secure solution to Auckland and Northland's future electricity needs. But his company would work towards a positive final outcome.

"The Electricity Commission has essentially agreed with Transpower that a new transmission line needs to be built ... The remaining differences of view appear to be centred on reliability and risk and when the new line should be prudently in place."

Dr Craven also cast doubt on the way the commission had compared its project to the range of alternatives.

The commission says Transpower's proposed line would cost about $775 million in 2010-dollar terms.

This figure includes extra equipment needed to carry the new line forward until 2030 and is higher than Transpower's $622 million estimate, which excludes the extra equipment.

Dr Craven said Transpower was deeply concerned about why the estimates were so different "when we are the proposer of the project".


What's next

* Public meetings held throughout May and early June.
* Public conference (if requested) in July.
* Final decision late July.