South Island generators must pay for HVDC upgrade

Media statement Friday, October 7th, 2005

South Island generators must pay for HVDC upgrade

The full $520 million cost of Transpower’s proposed upgrade of the High Voltage Direct Current Link must be paid by the power generators benefiting from it, the Employers & Manufacturers Association (Northern) says.

“The cost of the upgrade should be met by South Island generator companies, not North Island consumers” said Bruce Goldsworthy, EMA’s Manager of Advocacy.

“If the cost is spread across power transmission nationwide, the South Island generators in effect would become subsidized and able to reap super profits.

“The reasons for allocating all the HVDC link costs to South Island generators are:

- The HVDC Link exists to allow South Island generators to access the North Island market. If they could not do this their revenue stream would be unsustainable.

- Market mechanisms need to ensure costs lie where they fall in all cases.

- If the cost of environmental effects are included, such as the carbon tax proposed for thermal generation, then the same should apply to renewable generation when additional costs are incurred in the transmission system.”

ENDS

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