Timaru council proposing to sell off its Alpine Energy stake again
Thursday, 4 June 2026
One of the most controversial proposals put to Timaru ratepayers in decades is back on the table, but the mayor says this time the council has a clear plan.
The Timaru District Council has put forward a proposal for its holdings company, Timaru District Holdings Limited (TDHL), to sell its shares in Alpine Energy and reinvest the proceeds to provide better financial returns for the community.
TDHL holds a 47.5% stake in the lines company which is estimated to be worth $130 million. The other shareholders are Line Trust South Canterbury (40%) and the Waimate (7.54%) and Mackenzie (4.96%) district councils.
It’s been almost eight years since the council last floated the idea, which was met by strong opposition from the community, but mayor Nigel Bowen says things are different now.
If the proposal goes ahead, the proceeds of the sale would be invested into a ring-fenced diversified fund with any dividend to be paid to the council.
Bowen said that while the investment in the lines company remained valuable, it was not generating the level of cash return needed to help reduce pressure on rates and support essential services.
“Our proposal is about protecting community wealth and significantly improving financial returns,” he said.
The proposal comes as councils across New Zealand face growing pressure from rising costs, ageing infrastructure, and limits on rates increases.
“We’ve thought quite clearly through the risks. We understand the parochial nature of … selling an asset … but the balance to that is actually getting the best return for the ratepayer,” Bowen said.
He said the council had sent a letter of expectation to TDHL in December and asked the company to undertake a review of its assets.
TDHL had come back with a report, compiled by KPMG, which said “your best value is to look to divest that asset and … look to put it into managed funds…,” Bowen said.
The council said the change could improve its financial position by an average of $7m a year and, given Alpine Energy was planning to invest almost $400m in its network over the next decade, dividend returns were forecast to remain very low.
Bowen said they had also learned from the previous attempt to sell-off the shares.
“I think what’s quite different now is … it wasn’t clear where the money was going to [last time] … we’ve said … it needs to be a ring-fenced fund, a future fund.”
He said an example of that was when the Auckland Future Fund sold Auckland Council’s remaining stake in Auckland International Airport.
“It could still split the community, but I think it’s a conversation worth having.”
As such, the council was seeking feedback on the proposal, and Bowen gave an assurance that would not fall on deaf ears.
“We’ll take the … views of the community on board and that’ll be up to individual elected members to balance that.”
He said the lines company sat in a very regulated market under Commerce Commission control.
“Alpine will continue to deliver the essential services as it always has due to the regulatory environment it operates in, whether we own shares in it or not won’t change this.”
The proposal would not affect the regulation of electricity prices, which were set independently, and would not affect the community ownership of the Line Trust, which remained at the discretion of the consumers.
Councillors have less than four weeks before they will consider the proposal at a meeting on June 30.
In 2025, Alpine Energy posted a $12.1m loss following the discovery of an error that led to the overcharging of customers over nine years, with the Commerce Commission ordering a $16.9m refund following an investigation.
The holdings company received no dividend from Alpine Energy for 2024-2025, a far cry from 2019 when $2.75m was delivered after dividends of $2.65m and $4.7m in the two years prior.
Bowen said TDHL expected a divided from Alpine Energy over the next three years, but he understood that would be about $300,000 per year.
In 2018, it was the mayor of the time, Damon Odey, who put the highly-controversial idea to sell the shares, which were then worth an estimated $110 million, forward.
At the time, Odey said the plan would allow the district to realise the increased value of its shares and use them to contribute to the long-term prosperity of the district.
TDHL had a lot of money tied up in Alpine Energy which was its biggest investment, “dwarfing holdings in PrimePort and other investments”, and had “limited control over” it, he said.
He said the lines company operated in a heavily regulated market and the council/holdings company did not “have the technical knowledge and expertise to properly support” its growth prospects.
“As a council we cannot solely rely on increasing rates income to fund everything we need to do to ensure Timaru District remains a great place to live — we need to work our investments harder to get better returns.“
Odey rightly predicted that the community would be opposed to “selling off the family silver”, but said the council’s interest in Alpine Energy had been “purely financial for some time”.
Had his proposal gone ahead, the council could have made $3.52m in interest, on an annual basis, based on a 4% interest rate.
However, it did not, after more than 500 public submissions, most of which opposed the sale. The following month, Timaru District councillors voted unanimously against the proposal.
Just over a year ago, in April 2025, councillor Stu Piddington suggested the council reconsider the idea of selling its stake in the lines company, saying the time was right and the company was no longer the “golden goose”.
“Alpine Energy have indicated a zero return on a $139.7 million investment for three years and likely beyond that,” Piddington said at the time.
“If the zero-return continued for five years it means the council are potentially missing out on investment income almost $28m in total, or $5.588m annually, at a 4% return.
“That makes no sense to me.”
Piddington’s call came the same week the Commerce Commission confirmed Alpine Energy would not be charged for an accounting error which led to it overcharging its 33,500 customers over a period of nine years.
However, the company was issued a warning and ordered to refund customers $16.9m and spend at least $1.5m on community initiatives.
Piddington said he did not want proceeds of any sale to be spent on council operating costs, but rather invested into a sensible investment portfolio.
Acknowledging the community response to the previous sell-down attempt, Piddington said the council’s financial position had changed dramatically since then.
Last month Alpine Energy and Otago’s Aurora Energy released a joint statement saying the two lines companies had decided to drop a proposal to combine their operations.
“Following detailed assessment work, both organisations concluded that the model does not deliver sufficiently compelling long-term consumer benefits to justify the cost, complexity, and risk involved,” the statement said.
In December, the two companies announced they were exploring options for shared operations “to deliver better outcomes for customers” rather than investing separately in the same skills and systems.
At a council meeting last week, TDHL chairperson Mark Rogers said it was yet to learn the finer details around the decision, but expected a full shareholder’s update to be provided.
To give feedback on the proposal go to Timaru.govt.nz/alpine.