Aurora plans independent evaluation

Aurora Energy is to launch an independent review of its electricity network and seek a price rise to help pay for fixing it.

The company, in a written statement yesterday, said it was in talks with an engineering advisory firm, which it could not yet name, about carrying out the review.

The terms of reference were also yet to be finalised, but Aurora chief executive Richard Fletcher said that the initiative was a ''prudent response'' to the challenges associated with Aurora's ageing network.

Mr Fletcher, who took up his new role in January, said the ''time was right'' for an independent review under a new management team.

Results would be presented at a series of public meetings ''so that everyone has a common understanding of the state of the network'', he said.

In the meantime, the company had also notified the Commerce Commission of its intention to seek a customised price path (CPP) in mid-2020.

Aurora chairman Steve Thompson told the ODT the request would seek to increase the distribution line charge component of customers' electricity bills to fund future investment in the network.

The price increase would require the commission's approval, but it was not yet possible to say by how much prices could increase, he said.

Aurora had originally planned to seek a CPP in February next year, but pushed back the date to allow time for consultation ahead of any change, he said.

The company was planning an investment of more than $700million in its ageing network, which served Dunedin, Central Otago and Queenstown, over the next decade.

It had also just concluded a $30million fast-track pole programme, including replacing 2800 of the worst poles across its network, in December.

Dunedin Mayor Dave Cull welcomed the company's announcement, saying the review would provide ''absolutely transparency and objectivity around the state of their network''.

''It will be a completely independent review and perhaps put to bed some continuing claims that things are not all as they should be.''

Asked if it should have happened sooner, Mr Cull said the company had been grappling with ''too many moving targets'' before now, including its pole replacement programme, the separation of Delta from Aurora and the search for a new chief executive.

''You can't expect all of those things to be happening at once and be expecting to be successful with all of them.

''I think if it turns out that this independent review confirms their previous internally held view of the state of things, it will vindicate the way they've done it.''

A Commerce Commission spokeswoman said it typically set the maximum prices electricity lines companies could charge, as well as minimum quality standards to meet.

Any lines company could apply for a CPP, which typically sought to increase lines charges for consumers to fund network upgrades.

''The commission will scrutinise all CPP applications carefully to set a price-quality path that balances the lines company's needs with the long-term interests of consumers.''

chris.morris@odt.co.nz