The Commerce Commission released its final decision yesterday relating to Aurora’s pricing and limits on how much money the company can recover from customers to fix and run its network.
Aurora will be allowed to recover a maximum spend of $563.4million over five years — $45.9million less than the company had proposed.
However, that was $40.3million up on what the commission had signalled it would allow when it released its draft decision in November last year.
Aurora will not be allowed to grow its revenue by more than 10% each year, though an allowance could be made if inflation or transmission charges differ from forecasts.
The company had historically underspent on network upkeep, allowing its assets to deteriorate, and most of Aurora’s proposed spending to catch up was prudent and necessary, the commission decided.
"Without this investment, its network will continue to deteriorate, safety incidents will increase, and its customers will experience more frequent and longer outages," associate commissioner John Crawford said.
"Aurora must now deliver on its proposal."
Aurora is part of Dunedin City Holdings, which is owned by the Dunedin City Council, and the lines company supplies electricity to about 90,000 homes, farms and businesses in Dunedin, Central Otago and Queenstown Lakes.
Aurora Energy chief executive Richard Fletcher greeted the Commerce Commission’s decision cautiously, saying there were aspects that were positive.
Dr Fletcher was pleased the company had been afforded more latitude than had been signalled for the amount of capital and operational expenditure allowed.
The company’s case was credible and it had been heard, he said.
Lines charges increased this month and there would not be further increases this year.
The commission estimated monthly lines charges for residential customers would increase by between $32 and $51 by 2026, depending on where they lived.
Central Otago Mayor Tim Cadogan said price hikes were unacceptable, but so was a power network that did not work properly.
"We were always in a no-win situation after a decade or more of mismanagement and under-investment left us with a power network not fit for purpose."
Mr Cadogan said the commission had heard the valid concerns of the community "loud and clear".
Residents needed the commission to continue to be an active watchdog, he said.
Clyde resident and long-term Aurora critic Russell Garbutt said he was angry and bitterly disappointed about the lack of a reckoning for past mismanagement.
Central Otago residents were paying for the company’s failings twice, he said — once when money was diverted from where it should have been spent, resulting in a failing network, and again when money had to be found for the inevitable catch-up.
Dr Fletcher said Aurora would
continue to work closely with all its communities.
