Accord reached on Kaiwera Downs windfarm

Trustpower and the Gore District Council have finally agreed to terms over plans for a $400 million windfarm at Kaiwera Downs, but factors outside the power company's control mean the project is on hold.

Both parties yesterday confirmed they had settled their differences over a development levy the council wanted to charge for the right to build the windfarm in its area.

Originally, the council wanted $800,000 but the final deal, ratified in the Environment Court, settled on at least $650,000.

But that agreement did not mean a cheque for that amount would necessarily be written.

Some of it might be in the form of cash but TrustPower yesterday said the council might get value like roading works and other jobs carried out by its construction staff in the area while the windfarm was being built.

TrustPower spokesman Graeme Purches told the Otago Daily Times a tumbling exchange rate and the high price of turbines meant the Kaiwera Downs project was on hold.

"But I can categorically say we are going to build it, it's just a question of when."

When the project was conceived, its value was estimated at $400 million, but in today's dollars, that figure would probably exceed $500 million.

"We just have to wait for things to settle down," he said.

In a statement, Gore council chief executive Steve Parry said the deal followed "a tough negotiation process".

The key difference had been over the development levy.

TrustPower said no levy should be paid while the council remained firm, and followed the ruling of its hearings panel which stipulated a value of 0.2% of the project's value should be paid.

The deal meant TrustPower's financial contribution was set at either 0.2% of the value of the works or $650,000, whichever was the lesser.

The cap of $650,000 would be inflation-indexed.

Mr Parry said the other two key aspects of TrustPower's appeal had also been resolved.

Monitoring and reporting on "shadow flicker" would now focus on houses, stock yards and barns rather than entire properties within the turbine envelope, while the make-up of the community consultation group would stay unchanged.

Mr Parry said it was satisfying to have resolved all the issues without the need for an Environment Court hearing.

"We look forward to working with TrustPower in the future."

Mr Purches said TrustPower was "delighted" to have formalised its agreement with the council.

He said it showed how constructive outcomes could be reached when both parties were willing to sit down and talk about the issues.