Record power use gives healthy profit

Network Waitaki's head office. Photo by David Bruce.
Network Waitaki's head office. Photo by David Bruce.
Record electricity consumption because of a drought and a demand for extra services has more than doubled Network Waitaki's profit of recent years.

The community owned electricity lines company recorded a net operating profit in the past financial year of $7.887million, compared with $3.859million in the 2013 14 year and a net surplus after tax of $5.75million, compared with $2.696million the previous financial year.

In four years prior, the surplus fluctuated between $1.3million and $2.5million.

Network Waitaki is owned through the Waitaki Power Trust by the consumers the company supplies. The company owns the electricity distribution network to about 12,500 consumers from Shag Point to the Waitaki River, and inland to Ohau and the Hakataramea Valley.

Last Thursday, the trust held its public annual general meeting with about 25 people there to discuss the company's financial result to the end of March 31.

Trust chairwoman Helen Brookes, in her annual report, said the company was in a sound position, but also had a warning, ''... it would be unsafe to assume that such an outcome can be relied upon on an annual basis.''

The company's charges to consumers had two components - a fixed charge and a variable charge. The variable charge was based on electricity used, so the more a consumer used, the more they contributed to the company's revenue.

In last summer's drought, irrigators used more electricity than in a wet season, Network Waitaki receiving a higher income.

''The variable charge component cannot be relied upon to provide a consistent revenue stream, year in and year out. It all depends on the weather.''

Other factors included the company's contracting division now being included as part of the Network Waitaki income and more capital contributions from consumers seeking to increase or add connections (almost $2million higher).

Board chairwoman Clare Kearney said in her annual report the financial performance was higher than expected, and she also identified record consumption of electricity because of the dry conditions as a factor.

The company was facing an increase in load on its network in the rural area with the growth of irrigation and dairying.

It is undertaking a multimillion dollar upgrade of its network, spending about $8million in the past financial year with another $8million projected this financial year.

That work is being paid for by a combination of capital contributions, reserves, depreciation and income, which leaves the company in a strong position with only a $1.5million loan on an asset now valued at about $77million.

Major capital investment by the company included a new 66kV line from the Kurow to the Duntroon substation, due to be finished in spring, a new transformer at Lake Waitaki to transfer some of the load from the Oamaru substation and an upgrade of the Kurow substation to improve the supply to the Kurow and Hakataramea areas.


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