The benefits of consumers owning the North Otago electricity distribution company Network Waitaki through a trust should continue, a review of the company's ownership recommends.
All the shares in Network Waitaki, a company estimated in its annual accounts to have total assets of almost $76.5 million, are owned by the trust on behalf of about 12,000 electricity consumers in North Otago and the Hakataramea Valley.
In the past five years, the company has returned to consumers about $10 million in discounts off electricity bills, maintained low line charges - consistently ranking in the lowest quarter in New Zealand - and provided a reliable supply of electricity, focusing in recent years on improving service in rural areas.
The ownership review just carried out is required every five years, and now Network Waitaki wants to know what people think.
The directors and trust unanimously recommended the 14 million shares in the company continue to be owned by the trust on behalf of consumers.
Details of the ownership review were made public yesterday and people have until June 10 to make submissions. Submissions will be considered when a final decision is made on future ownership.
If any change in the ownership structure was contemplated, consumers would have their say in a postal poll, with 75% having to approve a change.
The review has looked at all forms of ownership, including the current trust, a company with shares listed on the New Zealand stock exchange, an unlisted company, a co-operative company, a community trust and ownership of the shares by local authorities.
It then discusses the advantages and disadvantages of various options, recommending the existing trust ownership as the best model for the community.
"Consumers of lines companies whose shares have been sold face significantly higher increases in line charges compared with consumers who have retained ownership and control," the review said.
In the first ownership review in 1996, 91% supported the continuation of trust ownership.
A 2004 offer by Aurora Energy Ltd of Dunedin to buy the company was rejected by 65% in a poll, with only 4% supporting it. The rest either required further information or did not know.
The trust, in its support of the directors' recommendation, noted that during the past five years, Network Waitaki had:
• Invested significantly in new capital and maintenance work to increase capacity of the network and further improve reliability to meet present and future demands.
• Returned almost $10 million to consumers by discounts.
• Line charges that were consistently in the lowest quarter of charges of New Zealand lines companies.
Those results had been achieved through trust ownership.
"The focus of consumer trust ownership generally is to ensure that the benefits of ownership are returned to consumers, who are the ultimate owners of [the] business," the trust said.
It also ensured only consumers received the benefits of owning the company.
The ownership review and submission forms are available from Network Waitaki's office, district libraries or the company's website.
