✨ Transpower Financial and Legal Notices
28 NOVEMBER 2011 NEW ZEALAND GAZETTE, No. 184 5345
TRANSPOWER NEW ZEALAND LIMITED LINES BUSINESS
(iii) Regulated rate of return
On 23 December 2010 the Commerce Commission announced the new regulatory framework that applies to Transpower. Under the framework the proposed rate of return is substantially below a level that the directors and their specialist advisors consider appropriate. The decision on the rate of return is being appealed through the courts. If Transpower is successful in its appeal the allowed rate of return may be increased retrospectively. An increase in the regulated rate of return of 10 basis points approximates to revenue of $3m per annum. At this stage it is too early to determine what the outcome could be. The revenue charged to customers for the April 2011 to June 2011 period reflects the rate of return proposed by the Commerce Commission.
(iv) Kapiti high voltage coalition
The Kapiti High Voltage Coalition (KHVC), a group of 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:
- 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
- alleges trespass on the basis that Transpower’s entry onto KHVC member properties was not authorised by s23(3) of the Electricity Act 1992.
If the Council decisions are set aside, Transpower will need to secure new consents. If the trespass claim is successful, Transpower 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. It is considered unlikely that any material liability will result from this action.
(v) Regulation
Transpower is allowed to recover the costs from projects set out in Grid Upgrade Plans (GUPs) approved previously by the Electricity Commission (EC) and now approved by the Commerce Commission (CC). If project expenditure exceeds the amount initially approved, Transpower must apply to the CC for approval to recover the additional amount from transmission customers. At 30 June 2011 five projects had exceeded the approved amount by a total of $14 million. Transpower has approached the CC to seek approval to recover these amounts from transmission customers. In the event that the CC did not approve the additional spend on a project, the additional spend cannot be recovered from customers.
(vi) Various other lawsuits, claims and investigations
Various other lawsuits, claims and investigations have been brought or are pending against the Group. The directors of Transpower 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 2011, No 184
✨ LLM interpretation of page content
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Capital commitments for Transpower New Zealand Limited
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💰 Finance & RevenueCapital commitments, Property, Plant, Equipment, Intangible assets, Financial reporting, Regulated rate of return, Legal disputes, Regulatory compliance