Why is Council considering selling its shares in Alpine Energy?
Council is reviewing whether its investments are delivering the best value for the community.
At present, the Alpine Energy shareholding is a large investment that is generating very limited income and is unlikely to provide meaningful returns in the near to medium term.
The proposal is to consider whether that capital could be reinvested in a way that delivers more consistent financial returns to support services and reduce pressure on rates.
Is this because Alpine Energy is underperforming?
No. Alpine Energy is a well-run and important infrastructure provider.
The issue is not the quality of the business — it is the type of returns it can provide. Due to regulatory controls and significant upcoming investment requirements, it is unlikely to deliver strong dividends to shareholders for some time. Yes future investments will see the value of the asset grow, but it is still unlikely to pay its owners any significant interest.
Council’s needs are different — it requires regular income to help fund services and manage costs for ratepayers.
What would happen instead?
If a decision were made to sell, the proceeds would be reinvested into a diversified, independently managed fund.
This fund would aim to:
- Generate regular income (dividends)
- Grow in value over time
- Provide long-term financial benefits for the community
The intention is to ensure the investment works harder for ratepayers than it currently does.
These wealth funds have a history of good performance including such as the New Plymouth Perpetual Investment Fund, which was initially set up in a similar way with the sale of PowerCo, the Auckalnd Future Fund and The HBRIC managed funds portfolio in Hawkes Bay or on a much larger scale the Guardians of New Zealand Superannuation.
How would the fund be protected? Could future councils spend the money?
The proposed model is based on creating a ring-fenced, independently governed fund, with clear protections in place.
Auckland Council has taken a similar approach, establishing a fund with independent governance and statutory protections to ensure it is managed for long-term benefit rather than short-term spending.
Any local model would be designed with similar safeguards to maintain discipline, transparency and accountability.
Will electricity prices go up if the shares are sold?
No. Electricity network charges are regulated by the Commerce Commission, not by the company’s shareholders.
This means a new owner cannot simply increase prices.
Regulations strictly control what can be charged, and ensure consumers are protected regardless of who owns the company.
Wasn't the Council was gifted the shares, so they aren't councils to sell?
Alpine Energy began in March 1906 when the Timaru Borough Council entered into a contract with Scott Brothers of Christchurch to light the town with electricity. The price for this contract was £750 per year for four hours of light per night – except when the moon shone.
In 1915 the council purchased the Scott Brothers’ electricity generator and a year later another generator was installed and about 580 customers had been signed up.
All electricity developments were in town until 1921 when a meeting of country delegates decided to form a South Canterbury Electric Power Board. The board set about forming a viable electricity supply enterprise across the province.
The South Canterbury Electric Power Board and the Timaru Borough Council agreed for the power board to purchase the town supply. However, the town’s residents voted against the proposal. From that day, February 29, 1924, the Timaru Electricity Department and the power board continued on their separate paths.
The Timaru Borough Council purchased all of its electricity from the South Canterbury Electric Power Board. This was from the Lake Coleridge power station supply which was made available at Temuka for distribution throughout Timaru and South Canterbury.
A significant step in the 1992 merger and formation of Alpine Energy Ltd was the creation of a truly representative, community owned company, with its shares allocated to the three local government bodies – and the creation of a new body to represent and hold shares on behalf of consumers.
Timaru District Holdings Limited gained proportionally more shares because of its previous sole ownership of Timaru Electricity but the final outcome ensured broad representation of these parties via their shareholdings.
The new owner will just want to extract its investment of the company?
This is hard. Electricity network charges and investment pathways are regulated by the Commerce Commission, not by the company’s shareholders.
Regulations strictly control what can be charged, and ensure consumers are protected regardless of who owns the company.
The type of owner we are looking for is an investor looking for a company that will grow in value over a long period of time, not particularly one that will provide a regular dividend.
Will selling the shares affect the reliability of the power network?
No. The reliability and performance of the network are governed by regulatory requirements and monitored independently.
Lines companies must meet strict service standards and publicly report on their investment and maintenance plans.
Those obligations remain in place regardless of ownership.
Does this mean losing local control?
Council already has limited direct control over Alpine Energy. While it is a major shareholder, it holds only a minority of board seats.
At the same time, the Commerce Commission has significant influence over the company through regulation of pricing, investment and performance standards.
The proposal recognises that modern regulation, rather than ownership, is what primarily protects consumers.
Why is this being considered now?
Several factors have changed in recent years:
- Alpine Energy’s dividend outlook is more constrained due to required network investment
- Financial pressures on councils have increased
- There is now a clearer plan for reinvesting proceeds
- Comparable models have been implemented elsewhere in New Zealand
Together, these factors make it appropriate to revisit the question.
Should you use the proceeds to pay down debt?
While paying down debt is an understandable thing, council debt is at a sustainable level and the returns from a managed fund are likely to be more than the interest that council pays.
Taking this route would not protect the returns from the sale in the long term either, it would offer a future council the opportunity to raise more debt at any point.
Putting the returns from the sale in a ringfenced, long term fund means that it is protected and only the investment returns are paid to council, not the principle amount.
Wasn’t this proposed before? What’s different this time?
Yes — a similar idea was considered in 2018 and generated significant community discussion.
At that time, there were important unanswered questions, particularly about what would happen to any sale proceeds.
Today, there is a clearer proposal for a structured investment fund, as well as more evidence from other councils about how this approach can work in practice.
The decision now can be made with more information and clearer options.
Who would buy the shares?
No specific buyer has been identified, however we have had interest from a number of parties including other lines companies and long term investment funds.
Any sale process would be structured, transparent and subject to appropriate oversight. Potential buyers would need to meet regulatory and commercial requirements.
In general, long-term investors such as infrastructure or investment funds are often interested in assets of this nature.
Would the community lose an important asset?
The electricity network itself remains in place and continues to serve the community, regardless of who owns shares in the company.
What is being considered is a change in ownership of shares, not the removal of infrastructure or services. The funds will remain invested, not spent.
The focus is on whether ownership through council remains the best way to deliver value to ratepayers.
What are the risks of this proposal?
As with any major decision, there are risks and trade-offs.
These include:
- Market risk associated with any investment fund
- Public concern about asset sales
- Ensuring strong governance arrangements are in place
These factors will be carefully considered before any decision is made.
What are the risks of not doing anything?
There are also risks in maintaining the current position.
These include:
- Continuing to hold a large asset that produces minimal income
- Ongoing pressure on rates to fund services
- Reduced financial flexibility for future councils
The decision involves weighing both options and considering what best serves the long-term interests of the district.
Has a decision already been made?
No. No decision has been made.
Councillors will consider whether to instruct the holding company to proceed, and community views will form an important part of that discussion.
How can I have my say?
You can have your say by emailing alpine@timdc.govt.nz or writing to Timaru District Council.
Community input is an important part of ensuring any decision reflects local priorities and concerns.
How would Council make sure the shares were not sold for less than they are worth?
Any sale process would need to be supported by independent commercial advice and a robust valuation process.
Council would expect a transparent and well-managed process so it could assess whether the price being offered reflected fair value for the asset.
No responsible decision would be made without confidence that the community was receiving appropriate value in return.
What consultation or approval would happen before any sale could go ahead?
No sale could proceed without Council first considering the proposal, the available evidence, and community feedback.
That means there would need to be a clear process, including public discussion and formal decision-making, before any final step was taken.
The intention is that the community would have the opportunity to understand the proposal and comment on it before Council reached a final view.
Why is a diversified investment fund considered better than continuing to hold one large local asset?
Holding a single large asset concentrates risk in one company and one sector. A diversified fund spreads that risk across a broader range of investments.
That can provide more stable returns over time and reduce the financial exposure that comes from relying too heavily on one asset to support community outcomes.
The proposal is not about undervaluing Alpine Energy, it is about whether a broader investment approach would better meet Council’s long-term financial objectives.
Would the fund capital be protected, or could future councils spend it?
The intention of the proposed model is that the fund would be established to protect the capital and manage it for long-term benefit.
That would mean putting strong rules around how the fund is governed, what income can be used, and what protections apply to the underlying capital.
The purpose is to avoid short-term use of a long-term asset and ensure the investment continues to benefit the community over time.
Myths and Facts
Myth: Council is selling the power network.
Fact: What is being considered is a change in ownership of shares, not the removal of the network itself. The infrastructure remains in place and continues to serve the community regardless of who owns shares in the company.
Myth: A new owner could simply put electricity prices up.
Fact: Electricity network charges are regulated by the Commerce Commission. Ownership does not allow prices to be increased at will, because pricing is set within a regulated framework designed to protect consumers.
Myth: Council would just spend the money and it would be gone.
Fact: The proposal being discussed is to place any proceeds into a ring-fenced, independently governed investment fund. The aim would be to protect the capital and use the returns to support the community over the long term.
Myth: This is happening because Alpine Energy is failing or poorly managed.
Fact: That is not the issue. Alpine Energy is an important and well-run infrastructure provider. The question is whether holding this investment remains the best way for Council to generate long-term value and income for the community.
Last updated: 09 Jun 2026