State-owned Transpower which runs the national grid earned $108m in net profit in the year to June, down from $134m the previous year. It attributed the fall to the impairment of system operator assets by $28.8m and a dramatic rise (from $0.7m to $14.8m) in the costs of instantaneous reserves charged to Transpower in respect of the HVDC link. Operating revenue actually rose 9% or $50.8m. Transpower says it has moved from a long period of very low investment to a concentrated period of high reinvestment in the grid. Major upgrade projects important to the security of the overall power system are now in various stages of development or construction. The transmission asset base is ageing, with many assets older than 40 years and some older than 70 years. An immediate concern is the lack of spare transformers and other key assets. Major changes have already been initiated to reverse the deteriorating trend in reliability performance. In particular a grid performance team which has been set up will place more focus on how existing assets are maintained.

Transpower is seeking a more open and co-operative approach with customers to understand better their issues and respond to them with timely solutions. Transpower’s relationship with landowners has slipped over recent years and significant actions are under way to make improvements. Increasingly landowners see infrastructure assets such as transmission towers as an impost, both for the effect they have on farming operations and their visual impact. This can prove challenging for maintaining existing assets despite the fact Transpower has the right of access to maintain them. Certain remedies such as removal, undergrounding or ongoing compensation, are beyond Transpower’s ability to deliver. Longer term, access issues may need to be addressed via a review of the Electricity Act 1992.

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