Call for Eastland Network to lower charges

File picture

HIGH local power prices are the result of “fake economics” in which power consumers pay for utility services they actually own, Tairawhiti Residents Association president Rick Thorpe told Gisborne District Council yesterday.

Mr Thorpe was making a submission to the Future Tairawhiti Committee, calling on the council to ask Eastland Community Trust to immediately stop increasing the network charges for Eastland Network.

There seemed to be a misconception in the community that Eastland Group was the economic driver, the powerhouse of the local economy.

Eastland Group was a service provider, a utility manager, to the primary drivers of the economy, which were pastoral farming, horticulture and forestry, in that order.

“It is a nonsense that trustees instruct Eastland Group to maximise the profits it can generate by charging us, the shareholders, for utility services we own.

“This is fake economics, dreamt up by those with an agenda to commercialise every aspects of our lives, fake economics that has not even delivered on its own expectations.

“We have experienced power charge increases of 130 percent under their watch. We see our network continuing to increase its charges, even though it is making record profits.

“The network’s ebitda (earnings before interest, tax and depreciation) last year was $13 million.”

The management of community infrastructure appeared to be dysfunctional. On the one hand, Eastland Group was planning to spend $200 million over the next five years — a big chunk not even in this region — and Gisborne Holdings Ltd was planning to spend $8 million on luxury accommodation and a new swimming pool, while on the other hand the council was struggling to fund basic infrastructure like roads and wastewater treatment.

“This is a nonsense that must be addressed,” he said.

Mr Thorpe said that at the annual meeting of the community trust the chairman said that any concerns or suggestions to change the direction of the trust should be directed to the council.

Saturday night’s Gisborne Herald editorial also said the trust chairman had indicated they were open to a lead from the council on these issues.

Trust’s annual statement of intent

Mr Thorpe said in clause 23.5 of the trust deed, there was provision for the council to make recommendations when responding to the trust’s annual statement of intent.

“Our submission is a plea to you to ask the trust to:

  • Immediately stop increasing the network charges
  • Consider discounting the network profits back to the customer as most other energy trusts do or
  • Adopt a ‘not-for-profit model’ and reduce network charges to reflect their net cost.

Mr Thorpe said the residents association would like to see the network embrace new technologies that would provide better outcomes for the community, very simply to focus on its core role as a community-owned utility, to serve the community.

“Not the other way around.”

Mr Thorpe said the Gisborne Herald online poll this week suggested 72 percent of respondents supported the not-for-profit model option. It also suggested that 95 percent would like to see a change.

Establishment of the trust was primarily to retain local ownership of the network, to protect it from privatisation.

Shares were not allocated to the consumers for that reason. Instead, the council was made the capital beneficiary.

The intent was always to ensure the network remained locally-owned for the benefit of local people. Allowing power bills to increase by 130 percent to unaffordable levels was never the intent.

“As our elected representatives, you have the power to change this. Please listen to the calls from our community for change and give this submission your serious consideration,” Mr Thorpe said.

HIGH local power prices are the result of “fake economics” in which power consumers pay for utility services they actually own, Tairawhiti Residents Association president Rick Thorpe told Gisborne District Council yesterday.

Mr Thorpe was making a submission to the Future Tairawhiti Committee, calling on the council to ask Eastland Community Trust to immediately stop increasing the network charges for Eastland Network.

There seemed to be a misconception in the community that Eastland Group was the economic driver, the powerhouse of the local economy.

Eastland Group was a service provider, a utility manager, to the primary drivers of the economy, which were pastoral farming, horticulture and forestry, in that order.

“It is a nonsense that trustees instruct Eastland Group to maximise the profits it can generate by charging us, the shareholders, for utility services we own.

“This is fake economics, dreamt up by those with an agenda to commercialise every aspects of our lives, fake economics that has not even delivered on its own expectations.

“We have experienced power charge increases of 130 percent under their watch. We see our network continuing to increase its charges, even though it is making record profits.

“The network’s ebitda (earnings before interest, tax and depreciation) last year was $13 million.”

The management of community infrastructure appeared to be dysfunctional. On the one hand, Eastland Group was planning to spend $200 million over the next five years — a big chunk not even in this region — and Gisborne Holdings Ltd was planning to spend $8 million on luxury accommodation and a new swimming pool, while on the other hand the council was struggling to fund basic infrastructure like roads and wastewater treatment.

“This is a nonsense that must be addressed,” he said.

Mr Thorpe said that at the annual meeting of the community trust the chairman said that any concerns or suggestions to change the direction of the trust should be directed to the council.

Saturday night’s Gisborne Herald editorial also said the trust chairman had indicated they were open to a lead from the council on these issues.

Trust’s annual statement of intent

Mr Thorpe said in clause 23.5 of the trust deed, there was provision for the council to make recommendations when responding to the trust’s annual statement of intent.

“Our submission is a plea to you to ask the trust to:

  • Immediately stop increasing the network charges
  • Consider discounting the network profits back to the customer as most other energy trusts do or
  • Adopt a ‘not-for-profit model’ and reduce network charges to reflect their net cost.

Mr Thorpe said the residents association would like to see the network embrace new technologies that would provide better outcomes for the community, very simply to focus on its core role as a community-owned utility, to serve the community.

“Not the other way around.”

Mr Thorpe said the Gisborne Herald online poll this week suggested 72 percent of respondents supported the not-for-profit model option. It also suggested that 95 percent would like to see a change.

Establishment of the trust was primarily to retain local ownership of the network, to protect it from privatisation.

Shares were not allocated to the consumers for that reason. Instead, the council was made the capital beneficiary.

The intent was always to ensure the network remained locally-owned for the benefit of local people. Allowing power bills to increase by 130 percent to unaffordable levels was never the intent.

“As our elected representatives, you have the power to change this. Please listen to the calls from our community for change and give this submission your serious consideration,” Mr Thorpe said.

Your email address will not be published. Comments will display after being approved by a staff member. Comments may be edited for clarity.