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Speaker 1: Transpower says they need to replace the electricity cable connecting

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Speaker 1: North and South. The cost one point four billion dollars.

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Speaker 1: The question how much will it cost us on our

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Speaker 1: power bills? John Harvard's Major Electricity us AS Group chairman

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Speaker 1: with me this morning, John, Good morning.

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Speaker 2: Good morning.

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Speaker 1: So cables went live first, went to nineteen sixty five,

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Speaker 1: replaced nineteen ninety one. End of life is twenty thirty.

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Speaker 1: So we've got to do this, don't we.

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Speaker 2: Oh, we absolutely do. The cable that connects the North

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Speaker 2: and South Island literally just keeps the light on in

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Speaker 2: both islands, so it's absolutely essential infrastructure.

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Speaker 1: What'll it do to prices? Change? Making the making the fix?

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Speaker 2: Yeah, So the one point four billion dollars that Transpaer

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Speaker 2: has quoted, that will all get passed on to consumers.

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Speaker 2: So the proposal effectively is that consumers will pay one

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Speaker 2: point four billion dollars more than they're currently paying. And

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Speaker 2: in the proposal, Transpayer talks about possibly doing an additional

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Speaker 2: cable for extra sort of backup security that will be

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Speaker 2: in addition to the one point four billion.

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Speaker 1: All right, we'll come to it back up in a second,

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Speaker 1: but let's stick with one point for for now, that

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Speaker 1: sounds like a lot of money, but it would be

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Speaker 1: spread over the life of the asset, wouldn't it, and

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Speaker 1: transmission only eight percent of our bill as it is,

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Speaker 1: Do we have any idea what the number might actually

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Speaker 1: look like?

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Speaker 2: Not yet. It's important to note that the transper has

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Speaker 2: to put a proposal to the Commerce Commission, and the

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Speaker 2: Commerce Commission will have the final say and how much

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Speaker 2: transpayer will spend, So until that happens, we don't know

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Speaker 2: the final number.

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Speaker 1: What to happen to manufacturers because they're obviously the big users.

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Speaker 2: Yeah, so what typically tends to happen is a greater

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Speaker 2: proportion of the costs of these projects falls on large

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Speaker 2: industrial manufacturers, so they will pay sort of more than

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Speaker 2: a fair share of the burden. That we're not arguing

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Speaker 2: with that we need the electricity, but as we know,

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Speaker 2: many of our manufacturing companies are already struggling with very

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Speaker 2: high electricity prices, and that will just make this situation

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Speaker 2: even worse.

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Speaker 1: We don't have a backup cable as is, right? Is

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Speaker 1: that done? What do other countries do.

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Speaker 2: Well? Most other countries are much more connected with each other.

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Speaker 2: So if you think if you're in Europe. You know,

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Speaker 2: if you're France and your Germany, you've got a land border,

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Speaker 2: you just you know, you've already got pylons and the

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Speaker 2: rest of it that connect to each other. But there

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Speaker 2: are countries where they do need cables that cross the sea.

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Speaker 2: So it's not new technology. It's the best way.

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Speaker 1: To do it, and it would be good to have

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Speaker 1: a backup, wouldn't it, just in case things go tips up.

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Speaker 1: Who benefits most from the cable? Is it the South?

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Speaker 1: You know? Do we send because I mean traditionally you

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Speaker 1: think that the South sends more to us. Is that

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Speaker 1: still true.

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Speaker 2: On average? Yes, but it's sort of a recent historical

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Speaker 2: trend has certainly been that more electricity is flowing from

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Speaker 2: the North Island to the South Island. Particularly, think like

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Speaker 2: last year or this year, which are dry years in

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Speaker 2: the southern hydro lakes are low and water well. Quite

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Speaker 2: often the North Island is moving, say geo through more

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Speaker 2: electricity or other forms of renewable tricity. They are just

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Speaker 2: more prevalent in the North Island down to the South Island,

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Speaker 2: and you get different seasonal flows as well, So the

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Speaker 2: electricity certainly flows both ways now more than it used.

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Speaker 1: To interesting, John, appreciate your time this morning, John Harvard,

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Speaker 1: a major Electricity Users Group chairman.

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