Dawn of a new Aurora era

Aurora and Delta chairman Steve Thompson. Photo: Peter McIntosh.
Aurora and Delta chairman Steve Thompson. Photo: Peter McIntosh.
After facing unrelenting pressure to up its game, Aurora Energy says it has stepped up to the challenge. Vaughan Elder reports.

Aurora chairman Steve Thompson said it had been under the "spotlight and the heat lamp" since accusations broke last October that it was endangering the public and workers by leaving its network, and in particular power poles, to deteriorate.

That pressure turned ugly at times and workers had been verbally abused, including while out doing their supermarket shopping.

Mr Thompson blamed the abuse on what he described as unfair criticism and media coverage.

But Mr Thompson said in the face of adversity, Aurora and its sister company Delta had achieved a "hell of a lot" in a short space of time.

The two companies were well on their way to splitting up in a divorce which Mr Thompson said would cost money in the short-term but reap huge benefits in the long-term.

Aurora was also mid-way through an ambitious accelerated pole replacement programme and this week announced a $720million plan to upgrade its ageing network.

Rapid change combined with immense pressure had been tough on staff, but Mr Thompson was proud of how the staff had responded.

"Just to change on its own when everything is going swimmingly would be hard enough."

The board had also brought in the author of a Deloitte report, Kyle Cameron, to make sure the business was properly implementing the changes he recommended in the wake of the dangerous poles scandal.

Mr Thompson said its actions should help renew the public’s faith in both companies, but emphasised he believed that faith had been unfairly shaken by what he described as over-the-top criticism in the past seven months.

He said safety concerns about the 2910 red-tagged poles across Dunedin, Central Otago and Queenstown Lakes had been overblown.

At the same time, Delta and Aurora’s efforts to confront the problem, both before and after the story broke in October, had been under-reported, he said.

"If half of the poles were going to fall over tomorrow in October, they would have fallen over by now wouldn’t they.

"The proof is in the pudding.

"In the six months since October you haven’t had catastrophic pole failure."

He accepted there had been isolated incidents, but this was not unusual on any large network.

Aurora’s conservative approach to safety in response to Roger Steel’s death in 2010 also meant red tags were placed on some poles which were not in need of replacing.

This had been borne out by retesting in recent months, which showed 10% to 15% of the poles were not compromised.

Despite his anger at the way Aurora had been treated by critics and in the Otago Daily Times, he was under no illusion the network was in top shape, saying it was the second oldest network in New Zealand and acknowledged major work was needed to improve it in the next 10 years.

But he would not be drawn on whether the situation had come about as a result of decades of underinvestment, which has been one of the main criticisms levelled at Aurora since October.

He said he was not in a position to comment given he only started midway through last year.

While Aurora had come a long way, more changes were coming and from July 3 Aurora and Delta would be based in separate offices and have separate boards and chief executives.

Aurora would remain at the two companies’  Halsey St headquarters, while Delta would move to Sturdee St.

The separation would come at a cost, which included having to pay two chief executives, but would save on the "big costs" later on.

The new model meant Delta would be Aurora’s preferred contractor, but outside contractors would be brought in to take some of the increased load as it scaled up its massive investment programme.

And while Aurora faced a difficult time financially until 2020 when it hoped to recoup costs through increased charges to consumers, the extra work would mean more income for Delta, which would need to hire more staff to meet the demand.

"It’s quite an exciting time for Delta, because they know they are going to get a contract with preferred status in it.

"And they know that the amount of work that’s coming in the next 10 years is increasing."

Mr Cameron said Aurora and Delta were making good progress on the recommendations he made last December.

"They have done everything they said they were going to do up until the end of June," Mr Cameron said.

The companies were well on the way to splitting and Aurora had a much greater understanding of the state of its network than it did a year ago.

There was still room for improvement when it came to clarity around assessing the condition of its assets and the systems used to track asset condition.

However, it was always expected these issues would take longer to address.

vaughan.elder@odt.co.nz

Comments

I understood in the wind of Clyde/Earnscleugh of a month ago, four power poles blew over in the basin and a line came off another about two weeks later. Does catastrophic failure depend on whether someone is standing under the pole when it falls?

 

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