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Powerco wants price rise for network

NZ Newswire logoNZ Newswire 17/01/2017 Paul McBeth
New Zealand's second largest electricity network owner Powerco has posted lower annual profit on higher revenue. © File photo New Zealand's second largest electricity network owner Powerco has posted lower annual profit on higher revenue.

Powerco, the gas and electricity lines company owned by fund managers QIC and AMP Capital, wants to raise prices to help fund an upgrade to networks across the North Island that it says could cost as much as $1.4 billion.

The New Plymouth-based company will ask the Commerce Commission to raise weekly prices by $1-to-$1.50 per household, it said in a statement.

Powerco distributes electricity to more than 320,000 houses and business across the North Island, implying a price hike if approved that would increase annual revenue by a range of $16.6 million to $25 million. The company's annual revenue was $457m in the 2016 financial year.

The five-year upgrade would kick off in April next year, and Powerco outlined where $875m of the proposed spending would go.

It's seeking community feedback on the planned investment before lodging an application with the commission later this year.

Waikato and Coromandel stand to get the biggest investment, with $160m flagged for regional growth and security projects and a further $90m to replace ageing assets.

That's followed by Taranaki, with a $40m spend on growth and security and $130m to replace overhead lines and poles.

Bay of Plenty would have $50m invested in growth and security and $90m spent on replacing old lines and poles. Manawatu and Tararua would have $60m spent on growth and security projects and $90m upgrading assets. Whanganui, Rangitikei and Ruapehu would get $20m invested in growth and security and $80m spent on upgrades, while Wairarapa would have $5m spent on growth and security projects and $60m on replacing old lines and poles.

Powerco said there were pressing concerns about the volume of assets near the end of their lives in Whanganui and Taranaki.

The company is the second-largest electricity distributor in New Zealand, managing 30,000 kilometres of electricity lines and 6,170 kilometres of gas pipes in Taranaki, Wanganui, Rangitikei, Manawatu, Wairarapa, Waikato, Thames and Coromandel, and supplying 435,000 customers on its networks.

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