Transpower posts $72m profit as grid costs and power prices climb

Wednesday, 4 March 2026

Transpower’s high-voltage lines carry power up and down the country. Rising costs are now feeding into household power bills.

ANALYSIS: Transpower’s profit has risen to $74 million just as major power companies are lifting prices, with storms, ageing equipment and higher interest costs pushing up the price of running the national grid.

The state-owned company, which moves electricity around the country, last week reported that it lifted its half-year profit from $64m a year earlier. Its income jumped about 16%, and its day-to-day costs rose by a similar amount.

Behind those headline numbers is a simple story – regulators have allowed Transpower to collect more money, bad weather is making the grid more expensive to maintain, and the cost of its $4 billion-plus debt pile has surged.

Electricity retailers are already pointing to those higher grid and network charges as they lift prices. That follows a 12.2% jump in the average price consumers paid for power across all providers last year, according to official figures.

Transpower does not send bills directly to households or firms. Instead, it charges lines companies and large industrial users, which pass the cost on.

Every five years the Commerce Commission reviews Transpower’s books and sets how much it can collect and what return it can earn. The latest reset started last year and recognised that building and maintaining the grid has become more expensive.

That decision alone explains much of the jump in income. On top of that, Transpower is still recovering money it didn’t collect in earlier years under the regulatory rules. More than $100m is yet to be recouped from customers over time through transmission charges.

On the cost side, Transpower is facing its own squeeze.

Big sections of the grid were built 50 to 70 years ago and are now due for replacement. The company’s maintenance bill jumped by about 25% in the second half of last year, as more crews were sent out to refurbish lines and substations.

Then there is the weather. Transpower links some of the extra spending directly to unplanned repairs after South Island storms.

The accounts do not list each event, but each job means helicopters, specialist crews and difficult access in hill and high-country terrain.

Those one-off repairs sit on top of planned maintenance and help drive up future budgets, as the company designs stronger assets to cope with more violent weather. For consumers, it is a sign that stormier seasons are now showing up in the national grid’s costs.

The other major pressure is interest.

Transpower’s rising maintenance and interest costs are adding to the pressure behind recent power price increases.

Between New Zealand and offshore markets, it owes more than $4b. When interest rates were low, that was manageable. Over the latest half-year, its average borrowing cost jumped from just over 3% to nearly 5%.

In dollar terms, its interest bill shot up from $59m to $95m in six months. That increase largely swallowed the extra cash generated by higher income.

The squeeze on consumers comes despite strong profits across the sector. Meridian and Genesis both reported big lifts in operating earnings for the same six-month period, helped by good hydro inflows and strong generation. Yet both invested less in new generation and growth projects than in the prior year.

At the same time, Transpower’s leaders talk about working “at pace” on projects “from Northland to Queenstown”, replacing old equipment and making room for more renewables. A deal to reserve manufacturing slots for the next Cook Strait cable in the early 2030s underlines the scale of those plans.

One of the biggest jobs is a $193m upgrade of the Upper South Island grid, aimed at strengthening supply into fast-growing centres such as Nelson, Marlborough and North Canterbury. For a typical Christchurch family, the upgrade would add about $35 to the annual power bill.

Yet spending on new projects and upgrades in this half-year was slightly lower than in the same period last year, with some work pushed into later years.

For households and firms, the combination is a bad mix: retail prices rising now, grid and network costs baked in for years, and key upgrades still in the queue.