Watchdog to hold forums for price rise feedback

Photo: ODT files
Photo: ODT files
Otago residents and businesses opposed to power price hikes as part of Aurora Energy’s proposed $383 million programme to save its network will be able to push for the hikes to be deferred.

But, the regulator is warning that could cost more over the longer term because of the interest added to potential financing taken out by Aurora.

In June, Aurora applied to the Commerce Commission to increase household bills in Dunedin, Central Otago and Queenstown Lakes by between $240 and $360 over three years so it can generate enough revenue for the investment needed to make its dilapidated network safe and more reliable.

The regulator will have "public drop-in sessions" across the region asking for feedback to help it decide on key issues it has within Aurora’s plan.

Yesterday, it released the "key issues paper" - its first response since Aurora applied for the price increase (a customised price-quality path or CPP) in June.

The commission wants to hear what residents think about the length of the reinvestment programme (three years or five years), power cuts (planned and unplanned), the impact of Covid-19 as well as whether consumers have confidence in Aurora to deliver what it is proposing.

Associate commissioner John Crawford said they were considering ways of delaying an immediate price hike.

"For example, would they prefer prices to increase in gradual and steady increments or price increases to be smaller in the first year, followed by larger increases in the following years to give more time to prepare."

Deferring did not mean avoiding what needed to be paid to fix Aurora’s network, the commission said. It would mean adjusting "the profile" of price increases over time to make them more manageable and potentially using finance.

"In addition, any costs shifted into the future also incur an interest expense to reflect the higher cost of financing, so the total amount recovered from consumers will be higher as a result," the commission’s key issues paper said.

It would also have to consider what effect that option could have on Aurora’s financial stability and whether that changed its ability to fix its network.

The commission also said customers were going to get slightly more frequent and longer unplanned power cuts - about 111 minutes per customer per year - because of the continued failure of old equipment.

Aurora expects reliability in its network - if it goes ahead with its proposal - to improve by 2024.

The commission said it was interested to see whether customers would be happy to pay more now and get fewer and shorter power cuts.

Planned power cuts were also expected to remain at "high levels", but similar to the past two years, as the work on the network continued.

The Commerce Commission’s role was to assess Aurora’s investment plan to make sure it was justified and to decide what revenue it could take in, as well as what level of service it needed to offer.

It is expected to announce its draft decision on the Aurora proposal in November with a final decision on March 31 next year.

Otago public sessions

Dunedin  August 6, 3pm-6.30pm  The Dunedin Centre (room 2), 1 Harrop St

Alexandra  August 10, 3pm-6.30pm  Alexandra Community Centre, 15 Skird St

Cromwell  August 11, 3pm-6.30pm  Cromwell & Districts Presbyterian Church, 10 Elspeth St

Wanaka  August 12, 3pm-6.30pm  Lake Wanaka Centre, 89 Ardmore St

Queenstown  August 13, 3pm-6.30pm  St Andrew’s Presbyterian Hall, 26 Stanley St
 

Comments

Are they bringing free subs and wee gifts this time like they did for the good people of Portobello last year?? I got a fridge magnet that is also a torch...very useful when your lines company is Aurora!

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