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Hydro companies will pass on any water charges, owner says

Thursday 11th October 2012

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Hydo-electricity generators will likely pass on any charges for water in higher power bills, Infratil, the majority owner of TrustPower, says.

The comment is made in a prospectus for a bond sale released by the infrastructure investor on Wednesday.

TrustPower and other hydro generators do not pay for access rights to water that have been granted by resource consents.

There is an increasing focus on the value of these access rights, and the issue of allocation is currently being addressed by the New Zealand Land and Water Forum, the prospectus says.

"It is possible that TrustPower and other hydro generators will eventually face some additional tax or resource rental for continued access to water.

"As with a tax on carbon emissions, these taxes would likely be passed through to consumers by increasing electricity prices," the prospectus says.

The government delayed the sale of 49 percent of Mighty River Power until next year while it consults Maori about a "shares-plus" concept in a report by the Waitangi Tribunal on the issue of water rights.

The prospectus also notes that Infratil's investment in TrustPower makes up a substantial part of its value and that there are risks associated that.

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