Under-fire lines company unveils $748 million spend over next 10 years

Friday, 19 October 2018

A linesman works on a power pole in Cromwell, part of a network owned by Aurora Energy.

A Dunedin-owned lines company, which is being taken to court by the competition watchdog, has revealed a $748 million decade-long investment plan.

Aurora Energy has published its first asset management plan, part of of a set of annual disclosures that the Dunedin City Council-owned company is required to submit to the sector regulator, the Commerce Commission.

Richard Fletcher, chief executive of Aurora, talks to media about the company's 10-year plan.

The company hit headlines this month when the Commerce Commission said it would be prosecuted for failing to meet standards due to under-investment.

'We believe the network is safe,'Aurora chief executive Richard Fletcher told media on Friday morning.

According to its website, Aurora Energy owns the seventh largest electricity network in New Zealand, supplying customers in Dunedin, Central Otago and the Queenstown Lakes district.

Whistleblower Richard Healey raised concerns over the Dunedin-based lines company in 2016.

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He confirmed the company, which split from Delta last year, would increase its network spend after several decades of under investment.

He declined to comment on future increases in line charges, prompted by the $748 million spend on new developments, and renewing and maintaining the existing network.

Customers had traditionally paid some of the lowest line charges in the country.

Fletcher confirmed shareholders – effectively Dunedin ratepayers – would not expect a dividend for at least three years.

The company's network delivers electricity to 88,000 customers in Dunedin, Central Otago and Queenstown Lakes.

Aurora's 10-year plan includes a proposal to replace 10,000 poles, including 6000 over the next three years.

He acknowledged the company's poor press since whistleblower Richard Healey went public with safety concerns two years ago.

Healey's colleague died in December 2010 after climbing a power pole that did not have a red 'do not climb' tag attached.

To alleviate concerns over safety, the company had prioritised testing and pole remediation work based on public safety risk, which included replacing those in higher density population areas first.

'I want to go on record as saying that concerns raised in October 2016 did prompt positive action, so lets give credit where it is due,' Fletcher said.

The company is also facing a potential fine of up to $5m for charges brought under the Commerce Act.

Aurora told the Commerce Commission it had breached the standards in 2016 and 2017, as part of its obligations as a regulated monopoly, sparking the investigation that led to the charges. It also breached its standards in 2018, which will be further investigated.

Those issues were historic, and the company's new management was addressing the concerns, Fletcher said.