Mana rules out wind-up option after Berl review

Big changes are in store for Hutt Mana Energy Trust if recommendations from an independent review are adopted.

The energy trust's major asset is a 10 per cent stake in Wellington-based electricity retailer Natural Gas Corp, whose share price has halved in the last year.

The review by consultancy Business and Economic Research Ltd (Berl) recommends against winding up the trust and instead wants it to beef up its operations and its distribution of money to the community.

But Berl warns that the trust has a real problem with its public credibility and that benefits to the community of the trust's activities have been "somewhat limited."

The trust - which represents about 84,000 power consumers in the Hutt Valley-Porirua-Wellington region - has endorsed most of Berl's recommendations, though not unanimously.

The report has given the trust enough confidence to rule out a referendum this year. Instead, trustees say they are happy to be judged at the polls.

Berl managing director Kel Sanderson said the trust had the potential to return significant benefits to consumers and the benefits would be greater if it continued to operate.

However, it would be a lost opportunity if it did nothing, rather than start using its money to benefit the community.

Berl is recommending the trust appoint two fulltime managers, one to manage its assets and the other to look for community projects and facilities the trust could help with.

These wouldn't necessarily all be energy projects.

Economic benefits could be significant to the trust's communities. Suggestions included Transmission Gully, commuter rail services, roading and water supply work, and a Rimutaka Hill road or tunnel.

The one major criticism the report made was that the trust's public support and credibility had been "poor," limiting its effectiveness. But Berl concluded that beefing up its staff and community activity would help that.

Early this year, trustees suggested that a referendum would follow the report but the trust has now decided against that and instead will take on its opponents in an election.

Trust chairman Jeff Berkett said the trust was worried that signalling that NGC's second-biggest shareholder was on the verge of selling would have a bad effect on the share price, which was already doing poorly.

But trustee Molly Melhuish said the review didn't address the trust's performance as a shareholder in first TransAlta and then NGC.

Mrs Melhuish opposed the deal last year to swap TransAlta shares for NGC ones.

A focus on community economic development was "inappropriate" for an energy consumer trust, she said.

- NZPA