The story of electricity supply to the Nelson region has always been a complex and dramatic tale but there has never been so much growth and change in as short a time as during the past 20 years.
The heritage of power
Network Tasman was created as a result of the 1998 government restructuring of the electricity industry. This prevented power companies from owning both an electricity supply business and an electricity distribution business.
In this region, the former Tasman Energy Limited chose to retain ownership of the distribution business which was renamed Network Tasman.
The supply arm of business was sold to Contact Energy Limited (effective from December 1998).
The first electricity supplier in the region was Kohatu farmer Robert Ellis. Mr Ellis introduced electric power to his home in 1908. Three years later he secured the region’s first licence to supply electricity commercially, using the waterwheel of a Brightwater flourmill. His company, the Waimea Electric Supply and Manufacturing Co., continued as an independent supplier of the Waimea Plains area until 1933.
Other electricity generation was soon set up, mostly under the wing of the local authorities. The Motueka Borough Council’s suction gas plant started producing electric power in 1921 and the next year the Murchison County Council’s Six-Mile hydroelectric scheme was commissioned, followed by the Nelson City Council’s steam powerhouse. The latter became operational in 1923.
The electricity supply, however, was soon under great pressure. Even though domestic use of electricity was generally limited to evening lighting only, the piecemeal generation network could not meet the growing consumer demand.
In 1929 the Waimea Electric Power Board was formed and almost immediately absorbed the Brightwater and Motueka plants, adding a hydroelectric scheme in the Brooklyn Valley.
The Golden Bay Electric Power Board was formed in 1925 and commissioned the Pupu hydroelectric scheme in 1929. Although there was a widely-held belief that the region needed a major hydro scheme, this was made impossible firstly by the Great Depression depression and then by the outbreak of World War 1.
The Nelson region had to soldier on with small schemes and supplementary supplies until the Cobb scheme was commissioned in 1944. The Cobb scheme had been started by the Hume Company in 1935 and was completed by the government led by Labour Prime Minister Peter Fraser.
Despite the fact that the post-war period was a time of expanding distribution and technological innovation and improvements, meeting power demand remained a problem. In 1951 the Murchison County Council commissioned a hydro plant on the Maruia Falls, but major relief came only with the 1958 connection to the national grid.
Until the early 1980s the focus remained on building and improving the region’s network, a process aided by amalgamation of the remaining suppliers.
In 1963 the Waimea Electric Power Board merged with Murchison’s electrical undertaking and then in 1976, the Waimea and Golden Bay electric power boards amalgamated forming a new body - the Tasman Electric Power Board. In 1988 this board changed its name to Tasman Energy. Nelson City Council power board remained separate.
In 1990 the Government appointed experienced directors to replace the elected boards of regional power authorities and municipal electricity departments. The five directors appointed to Tasman Energy faced a mammoth task; the application of commercial principles to a local authority servicing an area of more than 12,000km2.
A new company, but whose?
One of the fundamental issues the directors had to address was that of ownership. The Government was proposing legislation that would require all power authorities to be run as separate companies (legislation that would become known as the Energy Companies Act 1992).
The Tasman Energy directors considered whether they should form a publicly-listed company owned by private interests, form a company with shares vested in the local authority or form a company with ownership vested with electricity customers.
Tasman Energy took the view the community should not lose control of what was, in essence, a natural monopoly.
In 1992 the directors recommended the establishment of a customer trust, which would hold all the new company’s shares on behalf of consumers.
The public consultation that followed eventually gave the thumbs up to this proposal and the Tasman Electric Power Trust was established.
In 1996 the trust ownership structure was reviewed, as required by the company’s establishment document and trust deed, and continued with widespread support.
In 1998, following the establishment of Network Tasman Limited, the trust was renamed the Network Tasman Trust, to reflect the new company name.
In 2001 another ownership review confirmed continued consumer support of the trust structure.
Network Tasman Ltd has been owned by its consumers since 1993. The company’s focus is delivering a reliable and safe electricity network for consumers at the lowest possible cost.
The company’s network charges are amongst the lowest in the country. Network Tasman regularly makes discounts payments to its consumers and pays a dividend to its shareholding Trust (the Trust that holds shares on behalf of Network Tasman Ltd’s consumers).