NEW ZEALAND

Govt costs, labour worrying for Kiwi transmitters

Government or quasi-government charges are costing electricity lines companies over $NZ20 per cus...

A critical shortage of trained "live" linesmen also threatens to increase costs for the network companies.

During yesterday's opening session of the commission's conference into its proposed electricity regulatory regime, Hamilton-headquartered WEL Energy said contractors were warning lines companies of a worrying shortage of skilled workers.

WEL chief executive Mike Underhill is reported as having told the commission that linesmen were being attracted to a global market - for example, wages for linesmen in Australia were about 40% higher than they were in New Zealand.

Any skill shortage in New Zealand could hurt Kiwi lines companies' results as more power shutdowns would be needed to do necessary maintenance if fewer linesmen were available to do "live" work. Labour contributed just under half of WEL's overall costs.

Underhill also said WEL faced a $NZ23.80-a-customer increase in uncontrollable costs, including $NZ5 a customer to pay for the new Electricity Commission, $NZ1.50 a customer to pay for the lines regulatory regime, $NZ3 a customer for responding to the commission, and $NZ11 for present and future local body rates.

Total uncontrollable costs represented about 18% of WEL's 2003 budget.

The commission's threshold regime proposes different levels to apply to different groups of electricity lines businesses; with poorly performing companies facing higher required price reductions, while better performing businesses would face lower price reductions though required to make efficiency improvements.

Some lines companies are hoping to persuade the commission to relax its price thresholds, though acting chair Paula Rebstock has said the commission's draft is already conservative and that most companies will comfortably meet the proposed thresholds, which are to start next April.

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