To understand if our current power charges are fair it is worth going back to 1993 when our power distribution network was transferred to ECT, after the Energy Companies Act came into effect. Our community owned network was transferred to ECT at a value of $20 million. By 2003 it had been revalued to $77M and by 2015, in Eastland Group’s Report, it is now valued at $146M.
That’s good isn’t it? The commercial approach of EGL has increased our network value by 100%, but so have our power charges! We are paying 100% more than we did ten years ago. The amount of power being distributed each year has not increased, still around 300GWHrs a year, the number of connections is still around 25,000 so why has the cost to us increased so much?
Eastland Group is allowed by the Commerce Commission to charge us enough to generate a fair return on the asset value of the network, approximately 6%. By increasing the asset value by 100% they have been able to increase the amount they charge our community, over the last ten years from $19M to $38M. The kicker is that last year the network alone made a $9.6M profit (earnings before interest and taxes).
The restructuring introduced back in 1993 was supposed to ensure power charges remained affordable, clearly they have failed us dismally and it is time to find a new economic model that will work for our community. That $9.6M, back in the hands of residents and local business, would go a long way towards creating new jobs for our young people. What do you reckon?!