Forsyth Barr broker Suzanne Kinnaird said Meridian Energy was, as expected, clearly the big winner. But relative to the previous authority paper, Contact Energy was also a big winner.
New Zealand Aluminium Smelters benefited by not quite as much as expected. However, a $21 million per year benefit reduced production costs by about $65 a tonne, down 3%, and should be compared with the $30 million the Government gave the smelter company as a one-off payment three years ago.
"All eyes will now go on the smelter to see whether it has enough confidence to proceed with deferred maintenance capital expenditure, which will provide a strong signal the smelter will be staying open for the foreseeable future.''
Given the numerous swings in beneficiaries from one transmission pricing methodology (TPM) paper to the next, Ms Kinnaird advised caution on the actual scale of winners and losers.
The only constant through all the papers was Meridian being a winner. The only question was by how much. Contact had gone from being a reasonable loser to a big winner from the last paper to this one.
"Changes can't be ruled out when the authority arrives at its final decision.''
The authority proposed getting rid of the "avoided cost of transmission'' (Acot) payments, with Transpower providing payments directly to distributed generators based on actual benefits, she said.
The approach was not a big surprise, although, unfortunately, there was little clarity on how much distributed generators would be affected. The authority estimated total 2013-14 payments were $62million, of which Trustpower was understood to have received about $25million.
The best estimate the authority provided was it believed consumers were paying $25million to $35million too much for Acot. On a pro rata basis, it implied Trustpower would be hit by about $10million to $14million, Ms Kinnaird said.
It would depend on individual circumstances. Some Trustpower stations would no longer receive Acot and some would.
The authority was "optimistically'' seeking to make Acot changes quickly with 70% going through by April 1, 2017 and the remainder a year later.
"Given we expect Trustpower to challenge any changes through the courts, we expect implementation will be later.''
The Major Electricity Users Group planned to analyse the announcements, chairman John Harbord said.
