Holcim's Cape Foulwind Cement Works was Buller's single biggest electricity consumer until its closure in 2016. Photo: LDR / Greymouth Star/ Laura Mills
A stay on a 427 percent increase in electricity transmission charges for more than 4800 Buller consumers was welcomed Friday by the mayor.
Early this month Buller Electricity Ltd, owned by the Buller Electricity Power Trust, mounted a legal challenge against national grid operator Transpower, which proposed increasing transmission charges by 427 percent.
The increase was due to take effect from 1 April.
Today, Buller Electricity announced that following court action an interim arrangement had been reached "pausing any increases".
This would be until the judicial review application was resolved, it said.
Buller mayor Jamie Cleine said given Westport's relative isolation and low population, the stay was what might be hoped for in the circumstances.
"Buller is at the end of a pretty long line in terms of supply. Those charges passed on by the lines companies have a pretty powerful impact," Cleine said.
This was against a background of "an uncompetitive" market, natural disaster, and the loss of the district's single biggest electricity customer, Holcim Cement, which closed in 2016.
Cleine said he understood that loss to Transpower was to have been passed on to the rest of Buller power consumers, at a time when the district was significantly challenged after the flood recovery.
"That was my understanding, they effectively had to distribute that share of the line cost to all of the other connections on the network -- quite unhelpful.
"It's a pity it has to go to court action before that can be brought to the table -- a good outcome before it is eventually resolved."
Buller Electricity director Shannon Hollis said today the interim arrangement was the first hurdle in a process.
"For us it's the very first step in the process; it's what we were hoping to achieve."
The company was awaiting a formal hearing date in May.
Under the interim arrangement, Buller Electricity will be reducing the transmission price increases previously notified to energy retailers, such as Genesis, Pulse Energy and Contact Energy.
"We recognise this is not an ideal situation for [energy] retailers, some of whom may have already communicated the increased prices to their customers," Hollis said.
However, the overriding concern for Buller Electricity was avoiding "significant hardship" for local residents and businesses, caused by the massive transmission charge signalled by Transpower.
The effect of the interim agreement was to provide "much needed relief" for local consumers for the time being, until a court determination.
One of the terms of the interim agreement was that the parties would seek a fixture as soon as possible so the legality of Transpower's proposed reclassification of lines assets could be determined by the courts without delay.
The increase notified by Transpower in December largely reflected a change to the way it classified national grid assets in Buller.
Hollis said the impact was "particularly harsh" given the small population of about 4850 end-consumers.
Local Democracy Reporting is Public Interest Journalism funded through NZ On Air.
