New Zealand Gazette – 1998 – No. 128

Page 3149

✨ Electricity Information Disclosure by Otago Power Limited



31 AUGUST NEW ZEALAND GAZETTE 3149

(e) Motor Vehicles are recorded at historic cost less accumulated depreciation.

All assets, except freehold land and roads are depreciated over their estimated useful lives on a straight line basis or diminishing value basis as considered appropriate, commencing from the time the asset is held ready for use.

The economic life ranges for the various classes of assets are:-

(a) Hydro Assets

Dams - Headworks 50 to 99 years
Powerhouse and Associated Buildings 50 to 53 years
General Plant and Substations 26 years
Equipment and Tools 5 to 10 years

(b) Other Assets

Buildings and Residences 39 to 48 years
Distribution Equipment 16 to 25 years
Tools, Plant and Equipment 5 years
Motor Vehicles 5 years

  1. Taxation

The Taxation charge against the result for the year is the estimated liability in respect of that result after allowance for permanent differences and timing differences not expected to reverse in the foreseeable future. The Company follows the liability method of accounting for deferred taxation. Deferred taxation benefits are only recognised when there is virtual certainty of recovery in future periods.

  1. G.S.T.

These accounts are prepared exclusive of GST except for Accounts Receivable and Accounts Payable which are inclusive of GST.

  1. ASSET ALLOCATION

Under the Electricity (Information Disclosure) Regulations 1994, Otago Power Limited is defined as a line business, a Generation business and an Energy business.

The methodology for allocating costs, revenues, assets and liabilities between the businesses is on the same basis as outlined in the Electricity Disclosure Guidelines as issued by the Ministry of Commerce on 23rd June 1994.

FINANCIAL INSTRUMENTS

Otago Power Limited has various financial instruments with off-balance sheet risk for the primary purpose of reducing its exposure to fluctuations in electricity spot market prices. While these financial instruments are subject to risk that market rates may change subsequent to acquisition, such changes would generally be offset by opposite effects on the items being hedged.

Otago Power Limited has entered into electricity price hedging contracts with electricity generators in order to minimise the risk of price fluctuations on the electricity spot market. Assets, Liabilities, and any unrealised Revenues and expenses associated with these instruments as at balance date are not recognised in the financial statements. Realised revenues and expenses are recognised in the statement of financial performance on maturity of the hedging contracts and are incorporated as part of the cost of wholesale electricity.

CHANGES IN ACCOUNTING POLICIES

There have been no changes in accounting policies during the year. All accounting policies have been applied on a basis consistent with the prior year.



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