Prior to 1993, residents of Tauranga and Western Bay of Plenty purchased their electricity through the Tauranga Electric Power Board (TEPB). Following the Government’s 1993 restructuring of the NZ electricity sector, the Tauranga Energy Consumer Trust (TECT) was established in line with an agreed establishment plan.
Under the plan, 84 million shares were issued in the newly formed Trustpower. 50% were allocated to individual consumers (previous customers of TEPB) and rather than taking the remaining 50% for themselves consumers vested those shares in TECT for the benefit of current and future generations providing the trustees with a range of methods by which they could deliver these benefits.
The intention of the Trust was to provide both direct and indirect benefit (e.g. through community grants programmes) to the Trust beneficiaries. The trustees were given wide ranging powers through the Trust Deed to achieve this. The Trust Deed can be found here. At this time all consumers connected to the Tauranga Electric Power Board (essentially the entire Tauranga and Western Bay of Plenty community) were beneficiaries.
The restructuring of the electricity sector saw more electricity retailers enter the market. In 1999, further market reforms required Trustpower to choose between generation/retailing and owning a distribution network. The decision was made to focus on generation/retailing and exit distribution.
TECT beneficiaries (consumers) were confirmed as those that held a Trustpower power account in the Western BOP. Residents who chose to purchase their power from another retailer were now no longer beneficiaries of TECT. In 2003, TECT Trustees agreed to admit Trustpower account holders in Tauranga Council’s old supply area (the area between 17th Avenue and Sulphur Point) as beneficiaries of TECT.
Over time, TECT acquired additional shares through a share split and also an additional purchase of shares bringing its total shareholding to approximately 103m shares. In early 2015, TECT sold 20m shares in Trustpower and invested the proceeds in a diversified portfolio with the aim of diversifying the asset base of TECT. In 2016, Trustpower underwent a demerger that created Tilt Renewables Ltd. In 2018, TECT sold its holding of Tilt Renewables shares and these funds have been reinvested through the Diversified Portfolio. Today, TECT administers a diverse portfolio of investments. Approximately 40% of the assets are held in a diversified portfolio including a range of national and international investments.
Income Distribution Consultation
Prior to 2008 the income distribution was agreed on an annual basis after consultation on the draft annual distribution plan. In 2008 the Trustees formalised a policy where ‘approximately 80% of distributions are to be distributed direct to consumers, the balance to be distributed for indirect consumer benefit through the grants schemes’.
In 2009 a referendum was held to determine if consumers would like 100% of all money available to be distributed to each consumer. The proposal was overwhelmingly rejected. Results can be found here.
The current distribution policy is:
Approximately 80% of distributions are to be distributed direct to the trust beneficiaries, the balance to be distributed for indirect benefit through the grants schemes.
In line with this TECT provides benefits to its beneficiaries in two ways:
Direct - via the annual rebate
Of the $511M distributed since 1993, $394 million has been paid out direct to beneficiaries.
Indirect - via the grants programme
TECT makes grants and donations to community organisations throughout Tauranga and the Western Bay of Plenty each year. The funding ensures local amenities, events, projects and initiatives can continue to support a thriving, caring and connected community here in the Western Bay of Plenty. In the past 25 years, TECT has supported thousands of people and positive community projects throughout the TECT district, distributing $117.3M via the grants scheme.