‘A long process’: Alpine Energy at mercy of Commerce Commission, TDHL says

Thursday, 6 March 2025

In April 2024, Alpine Energy publicly admitted to overcharging its customers to the tune of about $19 million over nine years.

Almost a year after Alpine Energy publicly admitted to overcharging its customers to the tune of about $19 million over nine years, those customers are still waiting for the outcome of a Commerce Commission investigation.

The South Canterbury lines company admitted the historical overcharging error in April, but exactly how it will be resolved remains a mystery to those impacted, and delays are being blamed on the Commission.

“The Commerce Commission discussions are still ongoing at this stage, and that is a top priority,” Timaru District Holdings Ltd chairperson, Mark Rogers, said at Tuesday’s council meeting.

Councillor Stu Piddington asked whether Alpine Energy had given any indication on when the overcharge error might be resolved.

TDHL general manager Frazer Munro said Alpine Energy had no choice but to “march to the drum” of the Commerce Commission.

“No, they’re still working through it with the Commerce Commission,” TDHL general manager, Frazer Munro, said.

“The Commerce Commission has been prioritising the default price path regime for all of the EDBs, which comes in to play on the first of April, and they’ve been dealing with the Wellington … reduction in staff and … challenges.

“It’s been a long process with the Commerce Commission, we’ve got to march to their drum unfortunately,” Munro said.

TDHL owned a 47% share in Alpine Energy, along with Line Trust South Canterbury (40%), Waimate District Council (7.54%) and Mackenzie District Council (4.96%).

Rogers said they “hoped it would be [resolved] before now, to be honest, but there is nothing we can do in terms of speeding up the time frames”.

Munro said Alpine had been “pushing it hard” and wanted to get a resolution as it would help resolve “a whole lot of other accounting issues for them”.

“They are pursuing this actively.”

Alpine Energy discovered the overcharge error in August 2023, but did not front up to its customers until eight months later.

Alpine Energy was responsible for the distribution of electricity to 33,500 residential and commercial customers across South Canterbury. The error impacted all its customers.

The amount equated to about $2m a year, or 3% of the company’s total revenue from 2015 until August 2023 when the error was discovered.

It was eight months before the company fronted up to its customers, saying there had been a “non-deliberate” error which had overcharged them for the lines component of their bills.

On Monday, The Timaru Herald asked the Commerce Commission for an update on the investigation.

On Tuesday, a Commerce Commission spokesperson said she was not able to give a specific date on when a decision would be released.

Councillors Michelle Pye and Stu Piddington at a council meeting last month. They both put questions to TDHL bosses on Tuesday.

At Tuesday’s meeting, Rogers also delivered the council-controlled financial organisation’s quarterly report.

In summary, Rogers said its operational performance was tracking ahead of budget as of December 31, however forecast budgets for the year end were “negative to budget” due to moving The Showgrounds settlement into the next financial year.

“Further to this, it is now anticipated that incorporated Alpine Energy surplus will be negative to budget. This is a non-cash incorporation but impacts on the net profit and carries through to the financial performance targets which are now forecast not to be met.”

Councillor Michelle Pye asked whether the new Alpine Energy board had given any indication or plan on how they were going to “turn this around”.

Rogers said the Alpine Energy board had met with the board of TDHL at its last meeting “about a month ago”, during which they had discussed the letter of expectation and “how that ties in with their statement of a corporate intent”.

“We’re still working through, with them, on the detail of that in collaboration with all the other shareholders.

“But, I think it’s fair to say we are giving the new Alpine Energy board some space, underpinned by out letter of expectation, to come to us with solutions to provide sustainable energy in a commercially appropriate way that provides a dividend.”

In December, Rogers told the council they were working on getting sign off to use the Local Government Funding Agency (LGFA).

The LGFA, which provided financing to local authorities and council-controlled organisations, would give TDHL access to “materially lower interest rates and reduced interest costs”, Rogers said at the time.

On Tuesday, he gave an update and said the “LGFA accession was completed in December 2024, representing a significant enabler to TDHL’s diversification pathway and ability to pursue new investment opportunities”.