Alpine Energy ordered to refund customers $16.9m
Wednesday, 9 April 2025
Alpine Energy has revealed the size of refunds for customers ordered by the Commerce Commission arising from the lines company’s $16.9 million overcharging.
The commission, in confirming that the South Canterbury-based lines company will not be charged over the accounting error that caused the overcharging, said the money had been recovered.
Alpine Energy said on Wednesday that the amount of the credit depends on the type and size of the customer, with householders receiving $261.69, or about an average month’s power bill.
The Commerce Commission said it has issued a warning and negotiated enforceable undertakings after the accounting error, revealed in April 2024, resulted in the overcharging.
Commissioner Vhari McWha said the commission’s focus was on ensuring Alpine Energy returned the money it had overcharged customers with additional funds committed in recognition of the harm the error caused the wider community.
“We’re mindful that, given electricity is an essential service, consumers may have suffered unnecessary hardship as a result of this error,” McWha said.
“That’s why in addition to paying customers back the amount they are owed, we have secured a commitment from Alpine to spend at least $1.5 million to support access to electricity in the local South Canterbury community.”
Alpine Energy chairperson, Melissa Clark-Reynolds, said fixing the error had been a top priority for the board. She is pleased that Alpine Energy had reached a settlement with the Commerce Commission and could now implement its plans to return the overcharge to customers.
“The board acknowledges the concern and uncertainty this error has caused customers. We accept the decision from the commission today,” Clark-Reynolds said.
“Alpine’s customers will receive an Alpine-funded one-off credit in their May or June electricity bills.
“The credit will be $261.69 for about 91% of customers, including most or all household customers and many small businesses. We acknowledge and thank electricity retailers for passing the Alpine credit to their customers.”
Alpine Energy said, in addition to the credit to nearly 31,000 homes and small business, customers on three-phase connections will receive credits of $992.83, while credits for larger commercial and industrial electricity customers will depend on connection size and usage. Former customers affected by the error can also apply for a credit.
McWha said unpicking the effects of the error had been a lengthy but essential process to ensure the correct amount was returned to consumers.
Alpine Energy owns and operates the electricity distribution network that powers consumer homes and businesses in the South Canterbury region, which includes the Timaru, Mackenzie and Waimate Districts.
Partially owned by consumers connected to its network, the company paid a dividend to its shareholders, which included the community trust which in turn resulted in a distribution to consumers through bill credits to retailers.
“While we do not think the breaches were intentional, they are nonetheless very serious and preventable,” McWha said.
“The undertakings therefore also require Alpine to make improvements to its processes so it can avoid making similar mistakes in the future.”
The lines company, which services more than 33,800 customers, provided incorrect information disclosure statements to the commission relating to its depreciation calculations.
This information was used by the commission to set allowable revenues and Alpine’s maximum allowable revenue was overstated, leading to customers being overcharged for the lines components of their electricity bills between 2015 and 2024.
As part of the enforceable undertakings, Alpine Energy must carry out the following actions:
Refund current customers the $16.9m overcharged;
Establish a programme to provide discretionary payments to former customers who would otherwise not receive a refund;
Within two years, spend at least $1.5m on initiatives to support access to electricity in the local community, like community resilience, affordability and energy efficiency;
Prepare an improvement plan, setting out actions Alpine intends to take that are designed to mitigate the risk of a similar error occurring in the future.
In addition to enforceable undertakings, the commission issued a warning letter.
Alpine Energy adjusted its prices from June 1, 2024, to mitigate the impact of the error.
The $16.9m in refunds for the overcharge in previous years would be delivered by crediting the accounts of current Alpine Energy customers.
There would also be a programme to make payments to former customers who could show they were eligible for a refund.
A copy of the enforceable undertakings and warning letter are available on the Commission’s website.