10 Jul 2024

Transpower 'failing in their moral duty' over compensation - Northland MP

1:33 pm on 10 July 2024
Grant McCallum

The pylon falling was was "incompetence and negligence" MP for Northland Grant McCallum says. Photo: RNZ / Samuel Rillstone

The MP for Northland says it is "alarming" to hear Transpower has withdrawn from discussions about compensating businesses hit by last month's major power cut.

The pylon fell on 20 June when Omexom contractors removed too many nuts from bolts connecting the tower to a base plate during routine maintenance.

Transpower has defending its position saying it talked to local businesses in good faith and explored what compensation options might be possible.

Transpower executive general manager strategy regulation and governance David Knight said businesses who thought they had suffered losses as a result of the outage should lodge a claim with their insurance company.

But National MP for Northland Grant McCallum said Transpower would be "failing in their moral duty" by telling people to do this.

Transpower says a pylon falling over is the cause of the outage.

Transpower says a pylon falling over is the cause of the outage. Photo: Supplied / Kawakawa Electrical Ltd

"Reports that Transpower has withdrawn from discussions about compensation for Northlanders impacted by their power outage are alarming," McCallum said.

"This wasn't an act of God. This was incompetence and negligence. Transpower is entrusted with keeping our electricity network intact and they failed in an unforced error."

McCallum said it was Transpower's moral obligation to create a compensation scheme.

"It would be outrageous for Transpower to now walk away from those they have failed."

Earlier Transpower's Knight said in a statement consumers would be compensated "where these have appropriate evidence", via electricity retailers.

"The situation for businesses is more complex as they are generally not covered by the Consumer Guarantees Act."

He said Transpower's discussions with the Northland Chamber of Commerce made it clear the "only practical avenue for businesses who think that they have suffered loss as a result of the outage is to lodge a claim through their insurance company".

The insurance company could then engage with Transpower on their behalf, he said.

It was not practical for Transpower to guarantee supply, he said, because if it was forced to pay out every time the power was cut, "it would significantly increase costs for offering these services, and these higher costs would ultimately be passed on to consumers".

Northland Chamber of Commerce chief executive Darryn Fisher said Transpower was doing "a complete 180-degree flip" from its earlier position, making things more expensive and time-consuming for local businesses.