✨ Electricity Corporation Financial Notes
NEW ZEALAND GAZETTE
No. 167
Electricity Corporation of New Zealand Limited
Notes to the Financial Statements
18. Debt defeasance
On 1 February 1996 ECNZ sold eight power stations to Contact. Of the $1,592 million received from Contact, $419 million was used to defease debt and the balance was treated as surplus equity and distributed to the Crown as a special dividend.
19. Land claims
Under the Treaty of Waitangi Act 1975, the Waitangi Tribunal has the power to recommend, in appropriate circumstances, that land purchased by ECNZ under the State-Owned Enterprises Act 1986 be resumed by the Crown in order that it be returned to the Maori claimants. In the event that the Tribunal’s initial recommendation is confirmed and the land is to be returned, compensation will be paid to ECNZ under the provisions of the Public Works Act 1981. If this is insufficient to cover the loss, certain additional compensation is payable under the sale and purchase agreement between ECNZ and the Crown.
20. Transactions with related parties
The shareholder of ECNZ is the Crown. ECNZ undertakes many transactions with other State-Owned Companies and Government Entities, all of which are carried out on a commercial and arms length basis. During the year, ECNZ entered into material transactions with two such parties - Contact (refer notes 2, 18, 23 and 24) and Transpower.
Transpower operates the national electricity distribution grid. During the year ECNZ received $22 million (1996 $20 million) of revenue from Transpower, mainly for the provision of ancillary services such as spinning reserve and voltage control. ECNZ also paid Transpower transmission and connection fees amounting to $112 million (1996 $150 million).
ECNZ holds a 33% share in EMCO Limited (EMCO) which functions as a clearinghouse for the wholesale electricity market. Electricity sales revenues received by ECNZ from EMCO acting in its role as a clearinghouse for the wholesale market are not considered to be related party transactions. ECNZ paid service fees of $4 million to EMCO during the year. The amount payable to EMCO at balance date is not material.
During the year, ECNZ paid professional engineering fees of $86,264 (1996 $111,405) to Beca Carter Hollings & Ferner Limited which is wholly owned by Beca Group Limited of which Mr R P Carter is the Executive Chairman and a minority shareholder. Mr Carter is a Director of ECNZ. Professional engineering services provided by Beca Carter Hollings & Ferner Limited were supplied on normal commercial terms. A balance of $6,635 outstanding at balance date (1996 $5,259) is included in accounts payable.
During the year, ECNZ also paid professional engineering fees of $79,103 to Kingston Morrison Limited, for whom Mr S C Gentry is Executive Chairman. Mr Gentry is a Director of ECNZ. Professional engineering services provided by Kingston Morrison Limited were supplied on normal commercial terms. A balance of $998 outstanding at balance date is included in accounts payable.
21. Investments
| Company name | Percentage Owned | Principal activity | Balance date |
|---|---|---|---|
| Subsidiary companies | |||
| *DesignPower New Zealand Limited | 100 | Design and engineering consultancy | 30 June |
| *ECNZ Energy Limited | 100 | Energy | 30 June |
| *ECNZ Insurance Limited | 100 | Insurance | 30 June |
| *ECNZ International Limited | 100 | Finance | 30 June |
| *Energy Promoters Limited | 100 | Dormant | 30 June |
| *Kinleith Cogeneration Limited | 100 | Construction | 30 June |
| *Rutherford House Limited | 100 | Property management | 30 June |
| +Kupe Development Limited (acquired 1 January 1997) | 65 | Holding company | 30 June |
| ^Kupe Mining (No 1) Limited (acquired 1 January 1997) | 100 | Oil and gas exploration | 30 June |
| ^Kupe Mining (No 2) Limited (acquired 1 January 1997) | 100 | Oil and gas exploration | 30 June |
| Associate companies | |||
| Electricity Market Company Limited (EMCO) | 33 | Wholesale market development | 30 June |
| Rangitata Diversion Race Management Limited | 38 | Irrigation | 30 June |
- wholly owned by ECNZ
- 65% owned by ECNZ Energy Limited
^ 100% owned by Kupe Development Limited
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VUW Te Waharoa —
NZ Gazette 1997, No 167
NZLII —
NZ Gazette 1997, No 167
✨ LLM interpretation of page content
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Electricity Corporation Financial Position
(continued from previous page)
🏭 Trade, Customs & IndustryElectricity, Financial Statement, Financial Instruments, Revenue Risk, Credit Risk, Fair Values, Term Liabilities, Currency Swaps, Interest Rate Swaps
- R. P. Carter (Mr), Director of ECNZ and Executive Chairman of Beca Group Limited
- S. C. Gentry (Mr), Director of ECNZ and Executive Chairman of Kingston Morrison Limited