The size of future discounts electricity consumers receive off their power bills each year from Network Waitaki could be affected by who will pay between $20 million and $40 million to upgrade Trans-power's supply into North Otago.
While New Zealand's consumers are paying for Transpower upgrades of the Cook Strait cable and Auckland supply - Network Waitaki's transmission charge paid to Transpower has risen 43% in the past two years - North Otago may not get the same help.
That could impact on the annual discounts if Network Waitaki retains earnings to help pay for upgrading the Transpower link from Livingstone or, if it makes no contribution, annual Transpower charges increasing by more than $1 million a year.
The situation was outlined at the Waitaki Power Trust public annual meeting this week. The trust owns Network Waitaki on behalf of 12,150 consumers connected to its electricity distribution network between Shag Point, the Waitaki River and inland to the Hakataramea Valley and Ohau.
Because of trust-consumer ownership, since 2000 the company has paid out annual surpluses as a discount totalling almost $28 million.
Discounts vary according to the power usage category customers fall into. The bulk of residential customers this year received between $109 and $165.80. Larger power users such as farmers and companies receive higher discounts.
Trustee Dennis Norman said Network Waitaki, based on the financial year so far, was ''doing even better'' than last financial year, when its discounts totalled $2.3 million, and it was possible its surplus could be significant.
However, there was ''always a fly in the ointment''.
That was the need to upgrade Transpower's feed into the Network Waitaki network because of increasing demand for electricity, driven by irrigation and new dairying units.
Trust chairwoman Helen Brookes said demand was such that if all North Otago irrigation was turned on at the same time, it could cause an emergency on Transpower's supply.
Ripple control had been introduced on some high power-use irrigation pumps to reduce demand when it became too much, but that affected farmers and Network Waitaki's income by transmitting less electricity, she said.
Mr Norman said discussions had been held with Transpower about options to upgrade the supply into North Otago, at present at the Weston sub-station.
The preferred option was to provide an increased supply from Transpower's Livingstone sub-station.
While the upgrade could ''look after North Otago for another 40 to 50 years'', it would also be expensive.
''The supply to Weston is under stress and the upgrade will make our supply more secure,'' he said.
Because of the option being proposed, it would not be paid for by the whole of New Zealand, as was the Cook Strait cable and Auckland upgrades.
It would have to be paid for by Network Waitaki and its consumers, using reserves and retaining earnings at the expense of higher discounts.
Network Waitaki had three ways of paying for that - letting Transpower pay and then paying a big annual charge to meet the cost, paying part with Transpower and proportionately reducing the annual charge or paying the whole cost itself with no annual charge.
Dr Brookes said North Otago, and particularly irrigation, was important to the national economy, not just large urban areas such as Auckland.
At this stage, it was not known when Transpower would require the upgrade.
