Alternatives to Aurora sale raised

Andrew Simms (centre, right) speaks during a Dunedin City Council hearing yesterday about whether...
Andrew Simms (centre, right) speaks during a Dunedin City Council hearing yesterday about whether it should sell Aurora Energy. PHOTOS: GERARD O’BRIEN
Alternatives to a full sale of Aurora Energy have been brought up at a hearing in Dunedin, as the original proposal battles for public acceptance.

One idea was for the Dunedin City Council to sell 49% of the company.

Another was to sell just the Central Otago part of the operation.

It was also suggested a decision should at least be deferred until balanced and nuanced material has been put before the public about the pros and cons of a sale.

A community ownership model was discussed as well.

However, the leading alternative was simply for the council to retain the infrastructure asset.

Speaker after speaker at the council hearing yesterday described the electricity network as an essential utility that should not be privatised.

Many doubted a diversified investment fund would be more beneficial and they urged the council to take a long-term view about Aurora’s value.

The electricity distribution company operates in Dunedin, Central Otago and Queenstown Lakes.

It has not produced a dividend for the council since 2017, as the company has needed to invest significantly in its network and catch up on maintenance.

The possibility of the council retaining 51% of the company was highlighted by Mike Waddell, the first speaker at the hearing.

However, his preference was for the council to keep all of Aurora.

John Lewis
John Lewis
Retired electrical engineer Keith Moffat said public ownership provided better accountability and transparency.

The Central Otago part of the network might be best left for another provider, he suggested.

Former Dunedin mayor Aaron Hawkins criticised the council’s statement of proposal.

Lack of information on which the public could provide feedback was a "discredit to the institution", he said.

Mr Hawkins noted an agreed framework for how sale proceeds might be dealt with had yet to established.

He opposed a sale but, if the council was minded to pursue it, a deferral should be considered, he said.

Reduce Rates Group spokeswoman Robyn Vintiner said the group was supportive of a sale, but not to an overseas investor.

"To get the debt reduced, we need to sell the company," she said.

Mosgiel-Taieri Community Board chairman Andrew Simms, submitting as a businessman, said divesting for debt reasons was like "selling a house to avoid having a mortgage".

He described the "illiquid" nature of Aurora as being an advantage for passing on wealth to the next generation — as it was harder to squander than a liquid asset.

Retired investment adviser John Lewis said selling Aurora as "a short-term budget fix" would be a mistake.

"We don’t want a quick fix, with the cash squandered in a few years."

Central Otago was growing and the council might lose control of a strategic asset, Mr Lewis said.

Aaron Hawkins
Aaron Hawkins
Projections about how much an investment fund might yield seemed optimistic, he said.

Seniors Climate Action Network spokeswoman Sue Novell was worried about the council "gambling with ratepayer assets".

Retired arborist Jerry Lynch said a new owner, such as an overseas investor, might not have the same "social contract" as the council to be amenable to residents’ needs.

Tony Williams was sceptical about assurances a new owner would have to exercise restraint in raising prices.

"We know all too well the Commerce Commission rules with a feather-light touch," he said.

A beast or burden?

Aurora Energy could be an ugly duckling, a goose or, perhaps, an elephant.

Animal analogies were explored during an animated submission by Jonathan Daley at a hearing yesterday about whether the Dunedin City Council should sell the company.

Mr Daley began with the ugly duckling, then transitioned to a goose laying golden eggs but becoming ill and needing veterinary care.

"Do I stop building the future nest-egg on account of today being hard?"

Cr Lee Vandervis suggested vet services far exceeded what the council could afford.

Cr Brent Weatherall wondered if an elephant might be more apt, given how money-hungry the creature was.