Community funding a casualty of Alpine Energy overcharge error

Wednesday, 4 September 2024

An Alpine Energy representative competes during the Soapbox Derby in Timaru in October 2023.

Alpine Energy has confirmed it will stop its community sponsorship in the wake of its overcharging saga, but says it will meet arrangements already in place.

In a statement, issued on its website this week under the headline ‘Important sponsorship update’, the lines company announced the cuts, and suggested would-be applicants should seek help via another community trust.

“Alpine Energy will not be awarding additional funds for new sponsorship or personal development grants for the remainder of the year.

“Organisations with pre-existing arrangements will be supported, and these conclude in March 2025 … coinciding with the new regulatory reset period.”

The news follows a decision to suspend dividends to shareholders in the wake of news the lines company had been overcharging its customers to the tune of millions of dollars over more than nine years.

Brian Ruffell performing at a pop up concert in August 2023.

In the statement, Alpine Energy said “as a result of this impact, along with a review of our company strategy, we believe it is prudent to suspend both direct dividends and social dividends to our stakeholders”.

The lines company has long sponsored community events, groups and individuals, at its annual 2023 Sponsorship Awards it said more than 40 initiatives had been sponsored and 27 personal development grants awarded across the region.

On Monday, Alpine Energy confirmed prior applicants had been informed of the decision some time ago.

Alpine Energy chief executive Caroline Ovenstone pictured speaking at the annual awards in 2021. At the time, Ovenstone was chief financial officer of Alpine Energy.

“Moving forward, Alpine Energy will be assessing its approach to community engagement to align with our strategic purpose.

“We are committed to finding the best ways to continue engaging with our community while managing our resources responsibly.”

The statement ends by suggesting any applicants contact the Community Trust of Mid and South Canterbury (CTMSC) for alternative funding options.

Trust chairperson Nathan Mills said while it was happy to be the first point of contact, there was no guarantee it could help all applicants.

Community Trust of Mid and South Canterbury board chairperson Nathan Mills.

“We acknowledge Alpine Energy’s decision to indefinitely postpone their community granting programme.

“Unfortunately, it comes at a time where funding of community groups is tight, with the economic times hitting charitable groups and community organisations just as it is businesses and households.”

Mills said taking roughly $200,000 per annum out of the community funding pot was “regrettable and will likely place added pressure on other residual funders that don’t have unlimited pools of funding to cover that hole”.

He said the Trust’s budgeted granting pool for the year ending March 2025 was $2.05 million. So, the loss of Alpine Energy’s granting pool which constituted about 10% of that was “not insignificant”.

“… it’s important applicants who’ve traditionally sourced funding from Alpine Energy don’t assume they’ll be guaranteed funding …

Community Trust Mid and South Canterbury chief executive officer Liz Shea pictured handing a $40,000 donation to Food Rescue Aoraki’s Helen McKeown in February.

“In fact, there will be instances where CTMSC will be precluded from assisting financially because of our granting policies,” he said.

He said the Trust does not fund individuals, defibrillators or sports events or travel out of region, which is defined by the Waitaki and Rakaia Rivers.

“We’d encourage applicants look at the grant policies of funders … prior to lodging applications.

“By applying to the most appropriate funder/s, you’ll minimise the effort required, whilst giving you the greatest chance of success in sourcing funding.”

Last week, Commerce Commission general manager of infrastructure regulation, Andy Burgess, confirmed its investigation into Alpine Energy’s historic overcharging of customers was ongoing.

Burgess, who described the investigation as a “matter of priority”, said there were a range of potential actions the Commission could take including from taking no action to bringing proceedings.

Last week, the Taranaki-based TSB Bank was ordered to pay $2.47m for overcharging credit and default fees. The Commerce Commission sought the penalty after a review found the bank overcharged more than 42,000 customers over a six-and-a-half year period.

The bank is 100% New Zealand owned by charitable trust, the Toi Foundation (formerly known as the TSB Community Trust).

Alpine Energy is owned by four shareholders: Timaru District Council’s holdings company Timaru District Holdings Limited owns 47.5%, LineTrust South Canterbury owns a 40% stake, Waimate District Council 7.54% and Mackenzie District Council 4.96%.