It’s On - Our future developments
Investing to meet future energy needs
We are reaching network capacity and as our region grows, so does the demand on our network. By investing $166M over the next 10 years to replace ageing infrastructure we are able to provide a dependable service and support regional prosperity for the next 30-50 years.
So here’s what’s on for the next 10 years
- Network renewals
Replacing ageing assets that are reaching end of their serviceable life, at the most cost-effective time. - Increasing Capacity
Being able to deliver electricity in future as more businesses and consumers switch to energy from the grid. - Growing Resilience
Ensuring the distribution network is built to be resilient in extreme weather conditions. - Considered Investment
Asset investments and renewals are happening worldwide, there is no better time to keep pace with the region’s needs than now.
Main projects
New North Otago Grid Exit Point (GXP)
The Ōamaru GXP, where we receive electricity from Transpower’s national grid, has reached its capacity after years of upgrades. With rising energy demand, we’ll run out of capacity by 2027 if we don’t act. The solution is to build a new GXP, a $50M project that will strengthen our region’s energy security and support future growth.
New sub-transmission lines
We’re also upgrading our sub-transmission network to carry electricity from the new GXP to Ōamaru, with $11.8M planned over the next seven years. Some of this investment can be deferred if energy demand grows slower than expected.
How will we fund the project?
All distribution companies across New Zealand face the challenge of ‘what to do’ with ageing assets built between the 1950s-1980s.
Historically we have had some of the lowest prices despite being a smaller, mostly rural area. We have taken on debt for the first time to help fund network upgrades. Our year-end debt position last year was $10.15m. Debt to Total Assets ratio remains low at only 6.7%.
We are taking a responsible approach to funding the investment over the next 10 years, aiming to strike a balance between borrowing and the pricing we pass on to customers.
The level of debt is projected to step up to $50m over the next decade. But we can’t fund it on borrowing alone, some of the costs to ensure our networks’ resilience and capacity for future growth in the region need to be passed through to customers.
This approach of a combination of borrowing and pricing effectively spreads the cost to energy users who will benefit from this work over a 30-year period, rather than asking customers today to pay the full cost each year of the 10-year plan through increases in pricing alone.
