Latest / Best of Business / James Kilty: Transpower CEO proposes on $1.4 billion upgrade to Cook Strait electricity cables

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James Kilty: Transpower CEO proposes on $1.4 billion upgrade to Cook Strait electricity cables · Best of Business

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  Speaker 1: now Transpout.
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  Speaker 2: Transpot wants to replace the cook straight power cables that
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  Speaker 2: link the North and South Island. But here's the thing
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  Speaker 2: that comes with a huge price tag one point four
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  Speaker 2: billion dollars and if the Commerce Commission approves this, the
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  Speaker 2: cost will be passed on to us the customers. James
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  Speaker 2: Kilty is the new chief executive of Transpower.
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  Speaker 3: Hey James, Hello, how are you very well?
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  Speaker 2: Thank you? Now, James, I thought that this thing was
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  Speaker 2: going to cost about four hundred and fifty million. So
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  Speaker 2: why has it gone up so much in price?
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  Speaker 3: Yeah, talking about two different numbers there, head. So the
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  Speaker 3: four hundred and fifty million was given to be very
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  Speaker 3: transparent prey Christmas. Around the estimated cost for the cable
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  Speaker 3: portion of the project. The project includes at the one
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  Speaker 3: point four billion we're talking about today, which is a
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  Speaker 3: lot of money. I know. It includes the cables, but
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  Speaker 3: also all of the associated works which are a lot
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  Speaker 3: around the rest of the project. Five or six projects
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  Speaker 3: included in that in that scope, Heather, It's all laid
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  Speaker 3: out in our consultation document including the costs so people
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  Speaker 3: can can have a look at that.
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  Speaker 2: So what do we get for one point four billion.
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  Speaker 3: Well, you get a continuation the sort of two elements.
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  Speaker 3: You get a continuation of the ability to move electricity
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  Speaker 3: between the two islands for another forty years. The current cables,
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  Speaker 3: there's three cables actually Heather are coming to the end
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  Speaker 3: of their life. They and the associated works, they are
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  Speaker 3: all coming to the end of their life and we
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  Speaker 3: need to replace those. That is the vast majority of
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  Speaker 3: the cost. We're also suggesting that we add one more cable,
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  Speaker 3: a fourth cable. And remember these are the cables that
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  Speaker 3: offer access to the very best resources around the country
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  Speaker 3: to supply electricity at the most affordable, reliable and secure
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  Speaker 3: way to customers across New Zealand. And that's what this
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  Speaker 3: investment in New Zealand's future is all about. It's another
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  Speaker 3: forty year investment and we're suggesting that, planning for the future,
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  Speaker 3: we should add a fourth cable to add additional resilience
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  Speaker 3: and and incapacity between the islands.
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  Speaker 2: Right, So, if you get the approval from the com Com,
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  Speaker 2: how much is it going to cost me?
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  Speaker 3: You won't see anything for a number of years because
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  Speaker 3: it will be delivered. We have to book. These things
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  Speaker 3: are in such demand internationally, Heather, that we'll book. We've
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  Speaker 3: booked our parts and cruise and everything. But you won't
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  Speaker 3: see it built until twenty thirty and twenty thirty one.
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  Speaker 3: After that, Over the forty year life of the air set,
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  Speaker 3: you'll see a small cost in your bill at home
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  Speaker 3: associated with this product. Do you cover it over forty years? Yeah?
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  Speaker 2: You spread it out over forty years, do you?
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  Speaker 3: Yeah?
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  Speaker 1: Yes?
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  Speaker 3: The Communist Comission regulation of US ensures that all our
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  Speaker 3: costs are covered over the life of the asset. And
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  Speaker 3: this is a forty year asset. Hey, maybe it's forty five. Well,
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  Speaker 3: you know, we'll be working very hard to make sure
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  Speaker 3: it delivers securely for the long term.
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  Speaker 2: Can you say small? What do you mean?
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  Speaker 3: Very hard to put a number on it and be
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  Speaker 3: a few dollars a year. By the time it's spread
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  Speaker 3: across every connection in the country and spread over forty years,
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  Speaker 3: it'll be a reasonably small amount. Remember, your transmission costs
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  Speaker 3: are about eight percent of your electricity bill. That's our costs,
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  Speaker 3: and we expect that out that proportion, that eight percent
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  Speaker 3: proportion of your electricity bill for transmission will remain pretty
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  Speaker 3: stable through this project.
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  Speaker 2: James Listen, thanks very much for your time. Appreciated the
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  Speaker 2: James Keilty, the chief executive of Transpower.
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