18 Jan 2017

Powerco to undergo $1.4bn network upgrade

2:18 pm on 18 January 2017

One of New Zealand's big two energy distribution companies has unveiled a massive upgrade of its electricity network.


Photo: 123rf

New Plymouth-based Powerco will replace 27,500 powerpoles and cross arms, and well as 1600km of overhead lines.

It will cost $1.4 billion, and take five years.

The affected areas will be Coromandel, Eastern and Southern Waikato, Western Bay of Plenty, Taranaki, Whanganui, Manawatu, Tararua and Wairarapa.

Powerco chief executive Nigel Barbour said the proposal would help upgrade its service for 320,000 customers.

"Many of the poles and wires which make up the bulk of New Zealand's electricity networks were installed in the 1950s and 1960s," Mr Barbour said.

"This programme will see these ageing assets upgraded and replaced with more modern and resilient equipment."

Thousands of rotting power poles are due for replacement in Otago.

Powerco's upgrade comes after rotting power poles were discovered in Dunedin and Central Otago. Photo: RNZ / Ian Telfer

The Powerco move follows the controversial discovery of almost 3000 rotting power poles in Dunedin and Central Otago.

These were managed by two different companies, Aurora Energy and Delta.

Powerco could not say whether it had a similar problem, but the company's most recent asset management review indicated half of its 42,000 wooden poles would have to be replaced by 2025 and 15 percent needed immediate work.

Powerco's problems are matched by similar issues elsewhere.

Its big rival, Vector, has identified $1.8bn of work that is needed in Auckland, although this is complicated by that city's rapid growth.

Another complicating factor is the fact the need for electricity distribution wires could be reduced in future as solar panels and batteries become more affordable in everyday households.

The Powerco move needs approval from the Commerce Commission, as it will have to be paid for by higher bills to customers, estimated at an extra $1 to $1.50 per household per week.

New Zealand's entire regional electricity wire network is worth $10.5bn.