Tiwai could save $56m

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A CHANGE to the way the Electricity Authority charges for maintaining and upgrading transmission lines can not come soon enough in the south, authority representatives heard at a workshop in Invercargill last Thursday.
The option the authority is consulting on is expected to collectively save businesses and householders in Otago and Southland $64 million annually, Venture Southland research shows.
While householders would save around $65 a year, the biggest winner would be the New Zealand Aluminium Smelters (NZAS) Tiwai Point facility, which could save $56.3 million annually.
About 20 people attended the workshop, including representatives from NZAS, Pioneer Generation, PowerNet, Venture Southland, and the Southland Regional Development Strategy Group (SoRDS).
Venture Southland chief executive Paul Casson described the session as ‘‘very good’’.
‘‘Everyone in the room fully endorsed what the authority is trying to do. The philosophy they are looking at is ideal.’’
That philosophy rearranged the cost of maintaining and upgrading transmission lines to more clearly reflect the true cost of delivering transmission services, he said. Costs would decrease for consumers in 15 regions, including Southland, but increase in 14 other regions.
Tiwai was a major contributor to the Southland economy and it was important it increased its profitability, he said.
‘‘But a reduction in fixed costs would impact on other large businesses too. We might be able to attract more businesses to Southland if electricity costs were lower.’’
SoRDS governance board chairman Tom Campbell, a former Tiwai general manager, said the workshop was ‘‘very useful’’.
‘‘There is no doubt the proposal is good for Southland and much fairer than the current system.’’
Mr Casson said there was still much work for the authority to do before a new pricing system was introduced.
‘‘A decision is expected to be delivered in October, then [national grid owners] Transpower have until October next year to come up with an implementation plan to be in place by April 2019.’’

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