Source: Radio New Zealand
123RF
Wellington Electricity says it likely needs to eke out another $10 to $20 a month from customers to keep the power lines reliable.
That would be over and above approved increases by the regulatory each April through to 2030.
Christchurch lines company Orion was also writing to the Commerce Commission to increase would it could charge to maintain its network in the face of high growth in the region
Wellington Electricity chief executive Greg Skelton told Nine to Noon the company’s modelling showed it likely needed to charge customers an extra $10 to $20 a month to avoid a steep increase in the future and to keep the network reliable.
He said the company needed enough funding to keep an ageing network performing to deal with demand as households and businesses moved off gas.
“What we’re looking at is making sure we’ve got enough funding to keep maintaining the network as it ages and goes through,” Skelton said.
“There’s also funding we’re looking at to start to develop systems and capability and resources inside our business to look at the new future of electric vehicles coming on and being managed, looking at how solar needs to be managed.
“There’s legislation that we have to comply with from today around solar injecting larger amounts of energy into the network, and there’s also trying to manage the exit of gas and the 65,000 customers using gas at the moment, which is largely doing most of our heavy lifting.”
Once they electrify, they they had to build a network that was capable of managing that, he said.
He said they had already run out of maintenance allowances, and were having to spend above what they were allowed to keep the lights on and maintain assets.
Skelton said their modelling showed the number of the current age of performance and failure rates of assets was large – about $1.2 billion.
“Now, we wouldn’t be able to do that in five years. That’s a programme of work that has to happen over more than a decade,” he said.
“When we look at what we need to do in five years, we’re scaling that back from what would be $33 a month down to something that’s between $10 and $20 a month.”
The extra charges would likely come in from 2028, he said.
“We would probably have that smoothed by the commission, so it didn’t end up with a conflict of doubling the charges that customers are currently seeing,” Skelton said.
“It would be smoothed into the five years, probably starting from 1 April 2028.”
Skelton said the investment would help future-proof and optimise the electricity system, with the rise of solar.
He said sister companies in Australia and the UK had already gone through the processes, which was only starting to be introduced here.
“We can see the systems they’re providing; we can see how they’re starting to manage or orchestrate solar coming in, we’re seeing how they’re able to manage and push away electric vehicles into cheaper pricing periods,” Skelton said.
“Some of that’s on us getting our price signals right, and getting those passed through to customers so they then have choices of avoiding or choice of saying ‘we do want to operate in this period where it’s congested’ and therefore that’s a signal to us to say ‘yep, we do need to go and invest in higher capacity of that part of our network.’”
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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand