Transpower pumps power profits back into infrastructure

Transpower might be under pressure to upgrade energy capacity to meet a rising demand for power, but that hasn’t prevented the grid operator from posting a 27% rise in profit.

The owner of the national electricity grid saw its transmission revenue rise from $289.7 million to $310.7 million for the last six months of 2008.

The larger revenue take saw Transpower’s operating surplus after tax for the half year rise to $67.5 million, compared to $53.3 million the previous year.

Operating revenue for the six months of the year rose 7% per cent to $338.4 million.

The Crown-owned company’s surplus will be pumped back into major upgrade projects, instead of dividend payments back to the government.

The fragilities of Transpower’s supply were exposed last month, when a fault at the Penrose substation caused a power outage that affected 74,000 businesses and homes in the eastern suburbs of Auckland for several days.

Shortly after the power failures, it announced it was bringing forward $50 million of maintenance work on the national grid to April, although the work would not include upgrading the Penrose substation that caused the blackouts.

But the benefits of the major upgrade projects, which the company says are important to the security of the overall power system, are not expected to become obvious for several years.

The $2 billion projects now in various stages of development or construction, are part of an overall $3.8 billion investment planned for the next five years.

Transpower chairman Wayne Brown says the company recognises that a robust and reliable grid is essential to the economy and its programme of investment will address the deteriorating trend in reliability performance.

“While we’re very pleased with the upgrade and new project work to date, we’re conscious there’s still a lot to do.”