Powerco, New Zealand
– Second largest electricity and gas distribution business in New Zealand
Interest: 42%
Description
Powerco is New Zealand’s second largest electricity and gas distribution business with over 410,000 connections across a service area of over 39,000 km2 on the North Island of New Zealand. Powerco’s business represents approximately 40% of the gas connections and approximately 16% of the electricity connections throughout New Zealand.
Regulatory Environment
Improved regulatory environment due to new legislation designed to provide incentives to utilities and benefits to consumers:
- Utility has option to utilize a customized price path if thought to be beneficial.
- Regulator sets default price path for each utility.
Predictable Cash Flows
- Revenue mainly based on regulated tariffs. Electricity, which represents 80% of revenues, has grown at 1.2% CAGR over the past five years.
- Significant portion of revenues are from state-owned enterprises.
Diverse & Strong Customer Base
Broad, low volatility customer base, diversified both regionally and by customer class. Electricity and gas customers are largely residential, generally contracted via retail energy companies.
Growth Opportunities
- Energy demand and consumption levels.
- New connections as a result of new housing developments.
- Regional economic and population growth.