Increased line charges to fund upgrade

Top Energy is raising line charges to fund a $184 million upgrade of its network during the next 10 years.

The increases, which will take effect from February 2, will add about $15 a month to the average household’s power bill if they are adopted by electricity retailers Contact Energy, TrustPower and Mercury Energy.

Top Energy chief executive Russell Shaw says the upgrade is needed to improve the reliability and capacity of the network which was largely built in the 1960s and 1970s.

“The network has experienced significant demand increases in recent years. Top Energy has to substantially increase investment to improve reliability of supply and to expand the volume of power which the network can handle,” he says.

Key projects in the upgrade programme include building:

- A new dual circuit, 33kV high capacity line between Kaikohe and Waipapa

- A new substation near Wiroa Road in Kerikeri

- Seven new 33kV substations in Kerikeri, Russell, Purerua, Kaeo, Moerewa, Awanui and near Bulls Gorge

- New 33kV high capacity lines between Waipapa, Kaeo, Kerikeri, Haruru and Taipa

- Investing $9 million in a vegetation control programme during the next three years.

Top Energy will raise money for the upgrade – which represents $124 million of new capital expenditure – from operating profits, the sale and lease-back of Top Energy-owned buildings and bank borrowings.

“The profits the company is making from power generation have enabled us to keep line charge increases as low as possible.”

The investment will not only ensure a more reliable supply and greater network capacity, it may also encourage business growth.

“The results will be improved reliability of supply for all Far North power consumers, increased electricity capacity to meet future growth on the network and a more acceptable level of return on the company’s network assets.”

- © Fairfax NZ News