Meridian to gain in HVDC rejig

18:46, Oct 10 2012

Meridian is tipped to be the winner from a proposed overhaul of the way electricity companies are charged to export power across the national grid.

A three-year review of transmission charges yesterday culminated in a proposal from the Electricity Authority to revamp the way electricity generators are charged to use the line that links New Zealand's two main islands.

Now, the costs of the HVDC (high-voltage direct-current) line, which runs between Benmore in the Waitaki Valley, near Oamaru, and Haywards, near Wellington, are charged to South Island generators, with most of the export on the line heading northwards.

This means Meridian, New Zealand's largest electricity generator, pays the lion's share of the cost of the 610-kilometre line, because almost all of its stations are South Island hydro dams.

But the EA's proposals would see the costs of the line apportioned proportionate to the degree to which parties benefit.

Ralph Matthes, executive director of the Major Electricity Users Group, said though state-owned Meridian was likely to face increased charges elsewhere under the proposal, it was likely to benefit overall if the changes went ahead.

Mighty River Power, which generates from stations north of Taupo, was likely to face more than the status quo, Matthes said, adding that the proposal was an "elegant market-based solution".

For consumers the impact is less clear. In general, it appears that South Island consumers will pay less than they otherwise would for transmission charges, while those in the upper and eastern North Island will pay more.

EA chief executive Carl Hansen said overall the proposal was expected to result in slightly lower power prices. Fairfax NZ


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