20 Nov 2019

Aurora Energy Otago power lines price hike raises concerns

11:52 am on 20 November 2019

Aurora Energy's proposed power price rise - about 18 percent across Otago to make up for "historic underinvestment" - has residents worried.

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Lines company Aurora Energy is proposing households pay about 18 percent more from 2022 to 2024 to cover upgrades to its ageing infrastructure - and critics say the eventual cost could be even more.

If the $400 million program goes ahead, substations would be strengthened, 335km of overhead lines would be replaced and 4700 power poles replaced or reinforced - work the company said was needed to make up for "historic under-investment".

In a consultation document released yesterday, Aurora Energy was asking its 90,000 customers if they would foot the bill.

That set alarm bells ringing for Dunedin Salvation Army ministry leader David McKenzie, who knows a lot of people already struggling with living costs and going without food, or with very limited power.

"We know that in particular, child admission rates to Dunedin City Hospital - there's a good percentage of those over winter that are due to unhealthy housing not being kept warm enough. It's very, very hard for people and this possible increase in power prices is frightening," he said.

Over three years the work would cost an extra $588 for the average Dunedin household and $1536 for the average Dunedin small business.

Queenstown households would pay an extra $792 and Queenstown small businesses another $1248, while Central Otago and Wanaka households could expect an extra $1020 over three years, and Wanaka small businesses another $1600.

Those figures, provided by Aurora Energy, were a rough estimate that could vary per power retailer - but they were met with scepticism by former worker-turned whistleblower Richard Healey who spoke out about Aurora Energy's failing infrastructure three years ago.

He was dubious about what it defined as an average customer, and if the proposed work program was thorough enough.

"One look at the rebuild program tells me they're simply ticking boxes and they're not looking at the most distressed assets, the most in need," he said.

"If people think this is the final figure, they're delusional. This is just the tip of the iceberg."

Queenstown Lakes District mayor Jim Boult described the move by Aurora Energy as disappointing, and was already preparing to rally his council to stop it.

'I've heard a lot of feedback already today from people really concerned about this," he said.

"We want to take a careful look at the information we've been supplied and we're likely to commission some expert advice ourselves. But I'm pretty confident that we will be opposing, vigourously, this level of increase."

He said end users should expect to pay a little bit for improved infrastructure, but the majority of costs should be covered by the shareholder of Aurora Energy, which is Dunedin City Council.

Dunedin City Council has been approached for comment.

Richard Healey agreed the council should cover some costs, but said it was not alone.

"Absolutely the council needs to take some responsibility in this, but the boards need to take responsibility because they have an obligation to direct the company in a manner that we have a safe, reliable and economic network and they didn't do that. So the blame for this goes far and wide," he said.

Nobody at Aurora Energy was available for comment, but in a statement released with the consultation document, it said it was committed to listening to customers and refining its proposal where possible.

People have until 24 January to give feedback online or at drop-in sessions, and the final proposal will form part of a wider 'customised price-quality path' application to the Commerce Commission next year.

The Commission's expected to have the final say by March 2021.