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National grid operator Transpower has submitted an investment proposal to the Electricity Commission for a $521 million grid upgrade to reinforce supply to Auckland and Northland.

The project involved installing 37km of 220 kV underground cable from Pakuranga to Penrose and then to Albany, Transpower said today.

It also allowed for obtaining easements, consents and other preparatory work for a second cable between Penrose and Hobson St in later years.

General manager grid investment Tim George said the proposal provided the best solution to ensure a reliable electricity supply for power users in the north Auckland and Northland areas well into the future.

The demand for electricity in the north Auckland and Northland areas continued to grow and could increase by as much as 21 per cent over the next six years.

The project goes through a densely populated urban area, and when Transpower looked at all options, the underground cable option was $41 million cheaper than any alternative option including further overhead lines, the company said.

It was also the preferred option of the public workshops, Mr George said.

The lodging of the north Auckland and Northland investment proposal followed a robust consultation process that began in May 2006.

The investment proposal is part of Transpower's grid upgrade plan.

Transpower said the plan was being provided to the Electricity Commission by instalments over the next six or so months.