Trustpower to probe ditching rebates

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NZN

Trustpower will take a close look at a proposal by cornerstone shareholder Tauranga Energy Consumer Trust to ditch customer rebates in five years in favour of funding community projects.

Reviews are underway into the system used by a lines company in the region, which has previously been looked at by the Commerce Commission.

Source: 1 NEWS

The trust owns 26 per cent of Trustpower and distributes the bulk of its income to the power company's Tauranga and Western Bay of Plenty customers.

TECT has told Trustpower it plans to transfer its assets into a new entity to distribute funds to community and charitable groups, aiming to triple the amount available for those projects, and has asked the power company to support the plan.

The trust intends to make a one-off payment of $2500 to eligible customers representing five years of payments at the current average rebate and will continue payments until 2022, after which TECT would be wound up.

"What the trustees are proposing to do will fundamentally and permanently change the nature and purpose of TECT," Trustpower chief executive Vince Hawksworth said in a statement.

Trustpower would scrutinise the impact of the proposal on its local customers and seek their feedback. It would also take legal advice.

The Tauranga-based electricity generator and retailer is enjoying a strong year for its operations, with the North Island hydro dams flush with water at a time when rival South Island operations have gone through a dry spell.

Of Trustpower's 395,000 customers as at December 31, some 273,000 were electricity clients. The power company has been building up a base of clients who take bundled services - including gas and telecommunications - which has a lower churn rate than the national average.

TECT's proposal was released for consultation on Thursday, which closes on March 1.

Trustpower shares last traded at $5.92 and have gained 24 per cent over the past 12 months.

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