One of New Zealand’s largest companies is gearing up for a court battle over its rates bill.
Meridian Energy is taking legal action in the High Court against Wellington City Council, disputing the value used to calculate rates on two major wind farms.
The dispute is believed to be over payments worth hundreds of thousands of dollars a year.
Headquartered in Wellington and 51 per cent owned by the Government, Meridian generates around a third of New Zealand’s electricity, mostly from South Island hydroelectricity schemes. It is valued by the market at more than $6.5 billion.
But the dispute is over the value ascribed to two of its wind farms near Wellington, with the council and the company disagreeing over how the land on which the turbines are built should be valued.
Meridian is currently charged commercial rates on the wind turbines, which are located on farm land.
It is understood last year’s new rateable values (RV) pushed the rates up considerably and could cost Meridian millions of dollars.
The value of the wind turbines on wind farms often far exceeds the value of the land beneath.
One 987 hectare parcel of land owned by Meridian on Makara Road has a land value of just under $10 million, but an improvement value of $44m, giving a rateable value of $54m.
Council spokesman Richard MacLean said the judicial review proceedings related to the council’s existing rating policy.
Meridian Energy spokesman Guy Waipara said Meridian had applied to the High Court seeking a judicial review of rates due for West Wind in Makara and the nearby Mill Creek.
It was a review of “past and current revenue and financing policy decisions, the separation and rating information decisions and the commercial differential categorisation decisions made by the Wellington City Council,” Waipara said in a statement.
The court case had not been disclosed to shareholders because the amount of money involved was not considered to be material, he said.
Since the matter was before the court, both parties said they would not comment further.
Local Government New Zealand spokesman Joe Dawson said the case between Meridian and Wellington City may not be a test case.
“I am advised that because it’s a judicial review that means it is a review of the process taken to reach a decision, rather than the decision itself.”
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