10 Nov 2017

Power companies told to look after lines

6:13 pm on 10 November 2017

Electricity lines companies have been told off by the Commerce Commission for poor maintenance of their wires.

Power lines against a bright blue sky.

Photo: RNZ / Claire Eastham-Farrelly

The criticism follows a series of earlier reports of rotting power poles in Dunedin, and wires, transformers and switching gear past their use-by date in many places.

Although work has been done to fix some of these problems, lines companies have still been told to lift their game.

The criticism came from the Commerce Commission, which regulates lines companies' prices and the quality of their service.

"It is increasingly important that electricity distributors ...ensure reliability, safety, and resilience [of their wires]," the Commission's General Manager of Regulation Nick Russ said in an open letter to the industry.

"There have been a number of instances of significant non-compliance with quality standards we have set for distributors subject to price-quality regulation.

"We would expect [lines companies] to be increasingly focusing on the health and criticality of their assets, investment 'sufficiency' and the ability to supply power to consumers following events such as earthquakes."

Mr Russ added some consumers were concerned about being expected to pay higher prices in the future to make up for under-investment in the past.

And he said two or three companies were under investigation for falling well short of what was expected of them - one of those is the Dunedin company Aurora.

In the past, the Commission itself has been blamed for causing a lot of these problems.

That was because it limited the amount of money that lines companies can earn, and so dried up the pool of money available to buy new equipment.

One of New Zealand's biggest lines companies, Powerco, reckons it needs to spend $1.32 billion on its electricity network during the next five years - down from an earlier estimate of $1.4 billion.

To pay for that, it wants to make customers pay an extra $3 to $4 per month for an average power bill.

A draft response from the Commission is expected within the next few weeks.

Depending on the response from the Commission, several other firms are expected to lodge similar applications.

In a related development, the man who blew the whistle on Aurora Energy's rotting power poles last year has now said five out of eight high-voltage underground cables were failing or damaged.

The company replied that his comments were exaggerated and intended to cause unnecessary alarm.