Massive bill hike looms for Otago lines company customers

Tuesday, 19 May 2020

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

The Commerce Commission is reviewing a massive spend-up signalled by an Otago lines company.

Aurora Energy has signalled it needs to spend $400 million to address historic under-investment in its ageing power pole network which has led to safety issues and unplanned power cuts.

Aurora, under its draft plan to the Commerce Commission, estimated an average household’s monthly electricity bill would increase by 18 per cent, or around $21 a month in residential line charges.

The final proposed line charges from the Dunedin City Council-owned company, via another holding company, would be known in June.

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Richard Fletcher, chief executive of Aurora.

* Otago power consumer price hikes in pipeline

Commerce Commission associate commissioner John Crawford acknowledged that due to Covid-19 many household budgets were tight.

The commission, when analysing the company's proposal, would have to balance the impact to the 90,000 affected households, farms and businesses and ensuring the safety of the network.

The Commission planned to review Aurora's own consultation with consumers, while doing its own consultation.

A draft decision was expected before Christmas.

''We also want to know how well Aurora has communicated its plan to those affected, how it should be held to account for delivering on its plan, and how consumers want the Commission to engage with them, especially given Covid-19 restrictions,'' Crawford said.

A final decision on the company's investment plan would be made in March 2021, with consumer price increases taking effect a month later.

In March 2020 Aurora was fined $5m by the High Court over its network quality breaches between 2016 and 2019.