Auckland electricity lines company Vector faces charges over excessive power outages

Wednesday, 10 October 2018

The Commerce Commission is prosecuting Auckland lines company Vector 'for excessive level of power outages' in the High Court.

Vector has confirmed to the regulator that it will not contest the charges, related to its performance in the 2015 and 2016 financial years, which are set to be filed on Wednesday.

The competition watchdog said it would be asking the court to impose a financial penalty on Vector, which it said cooperated with the investigation.

'The commission will file proceedings under the Commerce Act alleging Vector failed to adhere to good industry practice in some aspects of its network management, which resulted in increased outages over that period,' the Commerce Commission said in a statement.

READ MORE: Otago lines company accused of causing power cuts due to under investment

Vector operates the lines which deliver electricity to more than half a million homes in the greater Auckland area.

The commission said during the period related to the charges, Vector did not meet good industry practice with regard to aspects of its governance of compliance with the quality standards and failing to put in place systems to predict and plan for the effects of increased traffic congestion.

Vector could face a fine of up to $5 million.

In a statement to the NZX, Vector said it was agreeing a settlement.

'The commission found that Vector breached this quality standard by 51 minutes in the 2015 regulatory year and 13 minutes in the 2016 regulatory year,' the company said.

It blamed the excessive outages on 'increased storm frequency and other weather-related impacts, increases in Auckland's traffic congestion, which have slowed travel times and can prevent maintenance crews from reaching network faults in a timely fashion' and health and safety changes.

The charges against Vector come less than a month after the commission confirmed it was prosecuting Aurora, the Otago lines company owned by a subsidiary of the Dunedin City Council.

Aurora, which had already announced it had commissioned an independent investigation was accused of under investment in the network.

'The commission alleges Aurora under-invested in asset maintenance and renewal, which led to significant proportions of its assets – such as poles, cables and transformers – being in a deteriorated condition and at or near the end of their service lives. The Commission considers that this led to an increased level of power outages and therefore significantly contributed to Aurora's breaches of the quality standards.'