New Zealand Gazette – 1997 – No. 167

Page 4009

✨ Electricity Corporation Financial Notes



28 NOVEMBER

NEW ZEALAND GAZETTE

4009

Electricity Corporation of New Zealand Limited

Notes to the Financial Statements

22. Segmental information

ECNZ operates predominantly in one industry, the generation and wholesale marketing of electricity. Its operations are carried out predominantly in New Zealand and are therefore within one geographical segment for reporting purposes.

23. Long term contracts

Gas purchase contracts

a) ECNZ has entered into a contract with Contact under which ECNZ is entitled to purchase specified annual gas quantities from 1 October 1996 to 30 September 2006. The maximum amount payable under the contract up to 30 September 2006 is $316 million.

b) ECNZ has entered into a heads of agreement with Fletcher Challenge Energy Limited under which ECNZ is required to purchase specified annual gas quantities from 1 October 2000 to 30 September 2017.

Coal purchase contract

a) ECNZ has entered into a contract with Solid Energy Limited to purchase specified quantities of coal up to 30 September 2001. The maximum amount payable under the contract up to 30 September 2001 is $62 million.

24. Memorandum of Understanding (MoU)

Pursuant to the MoU that was signed by ECNZ and the Crown on 8 June 1995, ECNZ has:

a) sold 8 power stations to Contact. These stations accounted for 29% of ECNZ’s generating capacity as at the MoU date;

b) revalued its assets as at 1 February 1996;

c) agreed to sell 8 hydro stations subject to appropriate consultation by the crown with Maori as to any Treaty of Waitangi issues. The stations involved (Cobb, Coleridge, Highbank, Matahina, Mangahao, Tuai, Piripaua and Kaitawa) accounted for 4.5% of ECNZ’s generating capacity at the MoU date. The Crown has advised ECNZ that consultation with Maori relating to Mangahao Power Station has been completed and that the sale of that station may proceed. Registrations of interest have now been received from eligible bidders.

ECNZ and the Crown also agreed on four additional constraints on ECNZ. These constraints cease to apply in the event that ECNZ’s total New Zealand generating capacity (measured in MW) falls below 45%. The constraints are:

(a) Cap on ECNZ providing additional generating capacity

ECNZ can only provide up to 50% of additional generating capacity. This constraint excludes:

i) refurbishments and modifications to existing hydro stations, provided that the additional energy is created from existing catchment areas;

ii) new plant using cogeneration or non-traditional renewable resources.

This constraint would include:

i) any refurbishments and modifications to Meremere, Marsden A and Marsden B;

ii) any increase in Huntly Power Station’s capacity above 1,000 MW.

(b) Ring-fencing of additional generating capacity

Additional generating capacity provided by ECNZ in New Zealand will be ring-fenced where:

i) the additional capacity is more than 10 MW; and

ii) ECNZ would have control over the development and sale of the additional capacity.

(c) Contract offer mechanism

ECNZ will offer on at least an annual basis, sufficient contracts to ensure that customers have the opportunity to contract ECNZ up to at least the level specified in the following table:

Years ahead Percentage of firm capacity
1 87
2 70
3 50
4 40
5 30


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✨ LLM interpretation of page content

🏭 Electricity Corporation Financial Position (continued from previous page)

🏭 Trade, Customs & Industry
Electricity, Financial Statements, Long-term Contracts, Segmental Information, Gas Purchase, Coal Purchase, Memorandum of Understanding, Power Stations, Generating Capacity