Meridian takes $1.2 million windfarm rates dispute to High Court

Tuesday 1st November 2016

Meridian Energy's dispute with the Wellington City Council over the rates it pays for its windfarms has gone to the High Court, with the electricity generator-retailer seeking a refund of about $1.2 million in what it claims are excess payments.

Meridian sought a judicial review of the rates imposed for its Wellington wind farms in the absence of any other process for appeal, the power generator's lawyer Adrian Olney told the court yesterday in the first day of the hearing. Meridian had previously challenged the validity of the whole rating scheme, but was now only seeking a ruling on how the scheme was applied, he said.

The city council calculates rates depending on whether land is considered 'base differential', which includes residential, vacant and rural land, or 'commercial differential', which includes property used for commercial or industrial reasons and utility networks. Meridian is currently charged commercial rates.

Olney said the wind turbines shouldn't be considered network utilities, which come under the council's commercial rate billing category C8, but should come under base category D1 instead. In the 2016 year, C8 rates in the dollar of the land's capital value were 0.820571 cents, while D1 rates in the dollar were 0.276524 cents.

Meridian isn't trying to escape or avoid paying targeted rates, contrary to the council's characterisation, Olney said.

"It doesn't escape the Tawa driveway tax, it just isn't a driveway in Tawa. One wonders whether that characterisation is a reflection of a sense within the council that there's an imbalance that needs to be righted by a more flexible approach. It would be improper and unfair if it is."

Wellington Council's QC, Ian Millard, said a refund had been calculated to cost more than $1.2 million. The council would have to borrow money to refund the rates, which would be of no benefit to ratepayers and would need to be funded by future ratepayers, he said.

"The council's view has always been that this is a big commercial operation, a big industrial operation," Millard said.

Justice David Collins reserved his decision. The judge said the High Court is quite short-staffed at the moment, so he wasn't sure when his ruling would be ready, but he would deliver it as soon as he could.

BusinessDesk.co.nz

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