Others discount back surpluses

LETTER

Re: Prudent operator of power network, Feb 9 letter.

Matt Todd appears to suggest that because our exorbitant network’s capital expenditure and EBITDA are close to the industry norm, this somehow makes them acceptable.

When comparing operating surpluses, Matt conveniently ignores the fact that most networks then discount back much of this surplus. For example, Network Tasman had an EITDA of $19.7m but then paid customer discounts of $11.9m. Also of interest, their capital expenditure was $11m however $5.4m was spent on completing their new advanced metering installations, and their total liability to assets are only at 19 percent.

Clearly the Energy and Resources Minister Megan Woods shares our concerns around the affordability of power, as she launches an inquiry this week into the electricity market.

Do we have to wait for a central government inquiry before our councillors and trustees accept our pleas for more affordable network charges?

Please remember the Herald poll back in November when 72 percent supported the “not for profit” model option for our network.

How ridiculous is it that the Government also needs to propose a Winter Energy Payment that will see taxpayer’s subsidising the electricity sector to ensure those less fortunate in our community can afford to heat their homes? This proposal will see up to $700 a year paid to superannuitants and people receiving main benefits for their electricity bills. What a dangerous precedent this will set; will they adjust the subsidy each year as power charges inevitably increase?

How does a “prudent operator” like EGL justify a liability to asset ratio of 55 percent, or an operating surplus of 50 percent, based on EGL’s annual report page F20; or, for that matter, a chief executive salary that is significantly higher than the Prime Minister’s? Oh that’s right, it’s “to keep the lights on”.

Rick Thorpe

Re: Prudent operator of power network, Feb 9 letter.

Matt Todd appears to suggest that because our exorbitant network’s capital expenditure and EBITDA are close to the industry norm, this somehow makes them acceptable.

When comparing operating surpluses, Matt conveniently ignores the fact that most networks then discount back much of this surplus. For example, Network Tasman had an EITDA of $19.7m but then paid customer discounts of $11.9m. Also of interest, their capital expenditure was $11m however $5.4m was spent on completing their new advanced metering installations, and their total liability to assets are only at 19 percent.

Clearly the Energy and Resources Minister Megan Woods shares our concerns around the affordability of power, as she launches an inquiry this week into the electricity market.

Do we have to wait for a central government inquiry before our councillors and trustees accept our pleas for more affordable network charges?

Please remember the Herald poll back in November when 72 percent supported the “not for profit” model option for our network.

How ridiculous is it that the Government also needs to propose a Winter Energy Payment that will see taxpayer’s subsidising the electricity sector to ensure those less fortunate in our community can afford to heat their homes? This proposal will see up to $700 a year paid to superannuitants and people receiving main benefits for their electricity bills. What a dangerous precedent this will set; will they adjust the subsidy each year as power charges inevitably increase?

How does a “prudent operator” like EGL justify a liability to asset ratio of 55 percent, or an operating surplus of 50 percent, based on EGL’s annual report page F20; or, for that matter, a chief executive salary that is significantly higher than the Prime Minister’s? Oh that’s right, it’s “to keep the lights on”.

Rick Thorpe

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w gerrard - 7 months ago
I like reading your opinion pieces Rick Thorpe, especially when they are about EGL, ECT etc and their trustees who have done nothing for our community regarding power prices. I am happy that Minister Woods is going to look into concerns over the high power prices we pay in New Zealand. Mat Todd is all spin and no substance.

winston moreton - 7 months ago
In reply to W Gerrard. "Au contraire". Mr Todd has been very successful in his role as CEO of the Eastland Group. He is doing his job (making a profit for shareholders) in accordance with the dictates of his directors. Those directors are selected by the sole shareholder ECT. ECT is a community trust whose trustees are appointed by GDC. Until GDC councillors get their annual appointment of trustees sorted, electricity accounts will continue to be used to fund business projects and investments outside Gisborne. W Gerrard is correct to say the trustees "have done nothing for our community regarding power prices". Disclaimer: Twice I have applied to GDC to be appointed as a trustee of ECT.

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