Dargaville gets boost in lines deal

Northpower has expanded its $406 million plus assets by buying some of Transpower's assets linking Maungatapere and Dargaville.

It has taken ownership of Transpower's two 40km-long 50,000 volt electricity distribution lines between Dargaville and Maungatapere for an undisclosed amount.

The asset transfer also sees Northpower take ownership of the former Transpower Dargaville substation and those assets within Transpower's substation at Maungatapere that are dedicated to the electricity supply to Dargaville from Maungatapere.

The company isn't saying how much it paid for the assets, but at the end of the 2011/12 financial year Northpower had total group assets of $406 million.

Northpower chairman Warren Moyes said the asset acquisition is a substantial addition to the company's infrastructure portfolio and represents good value.

"This asset transfer is very positive for consumers in the Whangarei and Kaipara districts because they now own the line," Mr Moyes said.

"Lines charges won't change due to the transfer, as Northpower has simply reallocated the amount that would have been paid to Transpower across to the distribution charges portion of the line charges."

He said that because Northpower has made significant progress on upgrading its own network, it is able to hold the normal component of line charge increases this year to 2.1 per cent, which is in line with the projected rate of inflation for the next year.

Northpower already owns more than 3700km of high voltage electricity lines (237km underground) and almost 2100km of low voltage lines (643km underground) in Kaipara and Whangarei. The new assets only supply the Northpower network.

"It is practical for Northpower to own, operate and maintain these local assets and, when required, design and install new equipment to replace 'end-of-life' assets or increase the supply capacity," Mr Moyes said.

"Transpower has maintained these assets, some of which have provided reliability well for over 80 years but which are now due for replacement, allowing Northpower the opportunity to make provision for future capacity increases to Dargaville. This will result in a 150 per cent increase in firm capacity for Dargaville over the next couple of years.

"That is an immense boost for future large industry in Dargaville, as that level of capacity increase will comfortably allow for the likes of a timber processing plant or a dairy factory. Enabling that level of growth in the Kaipara District will be great for the Northland economy."