Otago power company Aurora slapped with $5m Commerce Commission fine

Tuesday, 24 March 2020

A linesman works on a power pole in Cromwell as part of Aurora Energy's Fast Track pole programme.

Power company Aurora has been slapped with a $5m fine by the Commerce Commission.

The Dunedin-based lines company was ordered by the High Court at Wellington to pay the penalty for contravening its network quality standards after an excessive level of power outages between 2016 and 2019.

Aurora is wholly-owned subsidiary of Dunedin City Holdings Limited, which is owned by the Dunedin City Council.

That penalty will be delayed until after the Covid-19 crisis.

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Aurora Energy chief executive Richard Fletcher at a meeting earlier this year.

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The company owns and operates the poles, lines and other equipment that distributes electricity to 90,000 homes, farms and businesses across Dunedin, Central Otago and Queenstown Lakes.

Commerce Commission deputy chair Sue Begg said th company did not adequately respond to recommendations stemming from a 2014 warning.

In addition, the company's previous management and board were 'well aware of the deteriorating state of its network but failed to take action'. That affected its service.

Justice Jillian Mallon said a high penalty was warranted for deterrence purposes, and acknowledged Aurora had taken steps to address its historic underinvestment and to improve reliability in recent years.

Aurora was expected to apply to the Commission in June 2020 for a customised price-quality path (CPP) to support spending $400 million over three years to restore its network to address safety and reliability issues.

Last year Stuff reported that Otago power consumers could potentially pay their lines company up to $500 over three years, as it embarks on the investment programme.

That came after the company released details of its draft proposal, which outlined estimated increases in residential line charges for consumers, totalling $492 for three years between 2022-2024.

That included $21 a month for the first year, followed by up to $10 a month in the second and again in the third year, to fund an increase in network and related system upgrades and maintenance.

Former employee turned whistleblower Richard Healey told Stuff 'for three years I've been trying to wake this community up to the huge price rises that this catastrophic mess will involve'.

'Now we have the first glimpse behind the curtain of denial that the company and the council have drawn over the process.'