17 Sep 2018

Aurora Energy facing court action

6:30 pm on 17 September 2018

The Commerce Commission is taking court action against Dunedin-based electricity lines company Aurora Energy over breaches of quality standards.

Power lines against a bright blue sky.

Photo: RNZ / Claire Eastham-Farrelly

It says Aurora in 2016 and 2017 under-invested in asset maintenance and renewal, leading to poles, cables and transformers deteriorating.

The Commission is asking the High Court to fine Aurora, but hasn't specified an amount. Each breach carries a maximum penalty of $5 million.

Aurora has agreed to engage independent experts to undertake a full assessment of the state of its network.

Last November, company whistleblower and ex-employee Richard Healey revealed he had written to the Commerce Commission alleging Dunedin's network was heading towards collapse.

In 2016, he sparked a fast-track repair programme for a backlog of nearly 3000 red-tagged poles in the energy network around Otago.

Mr Healey's letter to the commission included leaked information from inside the company apparently showing five out of Dunedin's eight high-voltage underground cables are failing or damaged. At the time, Aurora called the letter scaremongering.

Richard Healey accused the Dunedin City Council of not doing enough to address rotting power poles in Otago.

Aurora whistleblower Richard Healey revealed last November that he had written to the Commerce Commission. Photo: RNZ / Ian Telfer

Aurora Energy spent approximately $30 million on fast-tracked pole repairs last year.

Aurora's chief executive, Richard Fletcher, said the company had undergone an extensive transformation during the past 12 months and significantly increased investment in its network

He said the Dunedin City Council-owned lines company was focused on the safety and reliability of its network.

Aurora has reported to the commission it also breached its quality standards this year, which is now under investigation.

Dunedin councillor Lee Vandervis wants the council to sell its lines company Aurora Energy.

He said this was the latest episode in an ongoing saga which showed the company was a liability for the city's ratepayers.

Mr Vandervis said the company had no dividends planned and a huge infrastructure bill going forward, which would be better managed by private ownership.

Chairperson of Dunedin City Holdings Limited, Graham Crombie, said the commission's decision was a step forward for Aurora.

"It's a good, positive move to move onto the next step. I mean we're very happy with the way the new Aurora team are working and this is just dealing with the historic piece and the sooner we get that settled and move on, the better."

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