James Kilty: Transpower CEO proposes on $1.4 billion upgrade to Cook Strait electricity cables

Transpower says upgrading the Cook Strait electricity cable would come at a very small cost to consumers. 

It's consulting on a $1.4 billion proposal - to upgrade existing cables and allow for building a fourth.

CEO James Kilty says the plan is to get another 40 years of stable electricity. 

He says because costs will be paid for over that 40 years, prices won't surge. 

"It'll be a few dollars a year - but by the time it's spread across every connection in the country, it's spread over 40 years. It'll be a reasonably small amount."

LISTEN ABOVE

See omnystudio.com/listener for privacy information.

Episode Transcript

Speaker 1 (00:00):
Now Transpower. Transpower wants to replace the cook straight power
cables that link the North and South Island. But here's
the thing that comes with the huge price tag one
point four billion dollars and if the Commerce Commission approves this,
the cost will be passed on to us the customers.
James Kilty is the new chief executive of Transpower.

Speaker 2 (00:15):
Hey James, hello, how are you very well?

Speaker 1 (00:18):
Thank you? Now, James, I thought that this thing was
going to cost about four hundred and fifty million, So
why has it gone up so much in price?

Speaker 2 (00:25):
Yeah, talking about two different numbers there, Heather. So the
four hundred and fifty million was given to be very
transparent free Christmas around the estimated cost for the cable
portion of the project. The project includes at the one
point four billion we're talking about today, which is a
lot of money. I know. It includes the cables, but

(00:45):
also all of the associated works which are a lot
around the rest of the projects. There's about five or
six projects included in that in that scope, Heather. It's
all laid out in our consultation document including the costs,
so people can can have a look at that.

Speaker 1 (01:01):
So what do we get for one point four billion.

Speaker 2 (01:03):
Well, you get a continuation the sort of two elements.
You get a continuation of the ability to move electricity
between the two islands for another forty years. The current cables,
there's three cables actually, Heather, coming to the end of
their life. They and the associated works, they are all
coming to the end of their life and we need
to replace those. That is the vast majority of the cost.

(01:24):
We're also suggesting that we add one more cable, a
fourth cable. And remember these are the cables that offer
access to the very best resources around the country to
supply electricity at the most affordable, reliable and secure way
to customers across New Zealand. And that's what this investment
in New Zealand's future is all about. It's another forty
year investment and we're suggesting that, planning for the future,

(01:48):
we should add a fourth cable to add additional resilience
and capacity between the islands.

Speaker 1 (01:54):
Right, So, if you get the approval from the com Com,
how much is it going to cost me?

Speaker 2 (02:01):
You won't see anything for a number of years because
it will be delivered. We have to book. These things
are in such demand internationally, Heather, that we'll book. We've
booked apart and cruise and everything, but you won't see
it built until twenty thirty and twenty thirty one. After that,
over the forty year life of the asset, you'll see
a small cost in your bill at home associated with

(02:24):
this project. Do you cover it over forty years? Yeah?

Speaker 1 (02:28):
You spread it out over forty years.

Speaker 2 (02:29):
Do you yeah? Yes? The Communist Comission regulation of US
ensures that all our costs are covered over the life
of the asset. And this is a forty year asset. Hey,
maybe it's forty five. We'll you know, we'll be working
very hard to make sure it delivers securely for the
long term.

Speaker 1 (02:43):
Can you say small? What do you mean?

Speaker 2 (02:48):
Very hard to put a number on it? To be
a few dollars, a few dollars a year. By the
time it's spread across every connection in the country and
spread over forty years, it'll be a reasonably small amount. Remember,
your transmission costs are about eight percent of your electricity bill.
That's our costs, and we expect that out that proportion,
that eight percent proportion of your electricity bill for transmission

(03:10):
will remain pretty stable through this project.

Speaker 1 (03:14):
James Listen, thanks very much for your time, appreciated the
James Keilty, the chief executive of Transpower, For more from
Hither Duplessy Allen Drive Listen live to news talks.

Speaker 2 (03:23):
It'd be from four pm weekdays, or follow the podcast
on iHeartRadio