✨ Financial Contingencies and Legal Matters
29 NOVEMBER 2010 NEW ZEALAND GAZETTE, No. 159 4033
TRANSPOWER NEW ZEALAND LIMITED LINES BUSINESS
27. Contingencies
(i) Guarantees
Debt
Transpower, and in some cases certain subsidiaries, have provided guarantees in respect of loan arrangements for the Bonds, Euro Medium Term Notes, Australian Medium Term Notes and the US Private Placement.
The likelihood of losses in respect of these matters is considered to be remote.
(ii) Economic Gain (Loss) Account
The Transpower Lines Business operates its revenue setting methodology within an Economic Value (“EV”) framework that analyses economic gains and losses between those attributable to shareholders and those attributable to customers. The balance of the accumulated gain (loss) from monopoly activities attributable to customers (“the EV balance”) has been passed on to or claimed from customers over time.
The net balance of the EV account at 30 June 2010 was $\19.0m to the credit of customers.
This balance is comprised of an AC customer credit balance of $\127.9m and a HVDC customer debit balance of $(\109.2m).
(iii) Kapiti High Voltage Coalition
The Kapiti High Voltage Coalition (KHVC), a group of 24 Kapiti landowners, has filed proceedings in the High Court in relation to reconductoring works carried out on the Mangahao-Paekakariki A and B lines before and during 2003. KHVC:
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seeks to judicially review the Kapiti Coast District Council’s decisions to grant a 1998 Certificate of Compliance and a 2002 Resource Consent for the works; and
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alleges trespass on the basis that The Transpower Lines Business’s entry onto KHVC member properties was not authorised by s23(3) of the Electricity Act 1992.
If the Council decisions are set aside, The Transpower Lines Business will need to secure new consents. If the trespass claim is successful, The Transpower Lines Business may not be able to access the works (or at least part of them) without obtaining easements and further damages claims might be brought, including by non-KHVC members.
(iv) Regulation
Under the terms of The Transpower Lines Business’s administrative settlement with the Commerce Commission The Transpower Lines Business has a threshold in relation to its non Part F capital expenditure (capital expenditure not approved by the Electricity Commission). In the event The Transpower Lines Business overspends its non Part F threshold, The Transpower Lines Business must apply to the Commerce Commission for approval prior to inclusion of these non Part F assets in the regulated asset base. The Transpower Lines Business exceeded its non Part F threshold by $\14 million. These assets are predominantly held in works under construction.
(v) Various Other Lawsuits, Claims and Investigations
Various other lawsuits, claims and investigations have been brought or are pending against the Group. The Directors of The Transpower Lines Business cannot reasonably estimate the adverse effect (if any) on the Group if any of the foregoing claims are ultimately resolved against the Group’s interests.
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NZ Gazette 2010, No 159
✨ LLM interpretation of page content
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Transpower New Zealand Limited Contingencies
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🏭 Trade, Customs & IndustryGuarantees, Economic Value Framework, Legal Proceedings, Regulatory Compliance, Lawsuits