Powerco’s new revenue limit reflects $1.3b network investment

The Commerce Commission has made changes to the revenue that central North Island electricity distributor Powerco Limited can recover from its customers, following a $1.3 billion programme of investment in its network during the past five years.

The new revenue limits mean that Powerco will be allowed to increase lines charges to its customers from April 1, 2023, expected to add about $2 per month to the bill of a typical residential electricity user connected to its network.

The decision relates to the expiry of ‘customised’ regulatory settings that Powerco had applied for in 2017. These involved a programme of investment to replace equipment built in the 1950s and 1960s that was nearing end-of-life, and to respond to increasing pressure on the network in power regions with strong population growth such as that seen in Tauranga, the commission adds.

With the customised settings expiring, the commission was required to set new revenue limits for Powerco that will apply for two years until it resets the revenue limits applying across electricity distributors again in 2025.

The new revenue limits for Powerco have increased to reflect investment that has been made to enable growth and maintain reliability for consumers, says the commission.  At the same time, the commission says it has taken care to ensure lines charges reflect reasonable costs with any increases to prices for customers being justified.

Powerco is the second largest electricity distributor in New Zealand, supplying electricity to more than 340,000 homes and businesses in the North Island. Its network covers Coromandel, South Waikato, Bay of Plenty, Taranaki, Whanganui, Manawatu, and Wairarapa.