The decision announced last Friday by Network Tasman to buy Marlborough Lines’ 50% share in Nelson Electricity Ltd for $26.7 million is good news and means we effectively have just one lines company in the region.
I was elected as a Trustee of Network Tasman last August and welcome this deal that has been secured by our Board, led by Sarah Smith, and CEO Oliver Kearney. It takes effect on 31 March from which time Nelson Electricity will be 100% owned by Network Tasman. It will bring efficiency gains to the benefit of electricity consumers in both Nelson and Tasman.
There is a complicated history behind this change that goes back to the days when electricity networks were developed in rural areas by power boards and in cities by Councils. Nelson City Council started its electricity company in 1923 with the Wakefield Quay coal-fired station. Areas such as Tāhunanui, Stoke, Atawhai and Wakapuaka were not then part of the city. The lines in these outer areas were developed by the Tasman Electric Power Board, which evolved into Network Tasman. This history has resulted in Network Tasman owning the network to 44,000 consumers (including most of the area covered today by Nelson City Council) and Nelson Electricity covering just 9,400 central-city consumers.
Nelson City Council in 1991 leased the Nelson Electricity network to Citipower (Wellington) and then in June 1996 controversially sold it 50/50 to Marlborough Lines and Network Tasman. I, then as MP for Tasman, argued that the City Council should merge Nelson Electricity and Network Tasman. It has taken 29 years for common sense to prevail with Network Tasman now owning 100%.
Network Tasman is a well-run, efficient lines company that provides significant discounts worth about $200 per year to its consumer owners. The immediate priority will be paying down the debt raised to buy out Marlborough Lines. The Network Tasman Trust will in future need to sort out this historic anomaly of some customers getting discounts and others not. However, this deal is an important step towards a more rational ownership structure of electricity infrastructure in the region.
