Vector dividend up - consumers to get $345

Ownership of a part stake in powerlines company Vector means a $345 dividend payout to many Auckland homes.

Hundreds of thousands of Auckland households can expect an increased dividend payment of $345 in late September from the community trust that owns most of Vector.

The Auckland Energy Consumer Trust has 318,000 beneficiaries throughout Auckland and its annual dividend will increase from $335 to $345.

Trust chairman William Cairns said the dividend boosts Auckland's economy by more than $100m, with a significant portion of the money being spent with local businesses across the city.

"We know this dividend makes a difference to many in our community - we discovered in a recent survey that more than 60 per cent of Aucklanders said their family needs their dividend to meet the rising costs of living in Auckland," he said.

The dividend distribution, which is New Zealand's largest, comes from AECT's majority shareholding in Vector, and has contributed more than $1 billion to Auckland since AECT was formed in 1993.

The trust owns 75 per cent of Vector, the Auckland gas and electricity distribution company, which posted a 2.8 percent gain in pretax earnings in the year to June 30.

Net profit fell about 13 percent to $149 million, on mark-to-market accounting charges and higher interest costs. Sales rose 2.8 percent to $1.29 billion. Cairns said it was pleasing to see Vector's dividend increase for the ninth consecutive year.

"Vector's financial results show a continuation of prudent investments outside of its regulated energy networks, diluting the impact of significant regulator-imposed price reductions to its energy distribution infrastructure."

AECT income beneficiaries are made up of Vector customers in Auckland, Manukau and the northern parts of Papakura. He said Vector's investments in new technologies including smart metering, telecommunications and solar and battery solutions will contribute strongly to beneficiaries' dividend over the long term as technology continues to change the energy industry.

See here who is eligible for the dividend payout.

Cairns said the trust remained concerned about a proposal from the Electricity Authority which would result in transmission prices increase by 59 per cent for Aucklanders.

"The AECT strongly believes the EA should remove the historic bias in transmission pricing which currently sees customers, rather than electricity generators paying the majority of the cost to transmit electricity from often remote generation sites to cities and town across the country.

The authority proposals were complex and untested and would result in small customers being financially worse off while electricity generators and large industrial consumers would benefit financially from the proposals to the tune of $23m and $74m per year respectively, said Cairns.

Mighty River Power is also concerned about the authority proposals.