Huge power price hikes on cards for Otago households

Aurora Energy chief executive Dr Richard Fletcher said the company acknowledged the price rise...
Aurora Energy chief executive Dr Richard Fletcher said the company acknowledged the price rise would be difficult for some customers.
Power prices could rise by nearly $500 for many Otago households, according to Aurora Energy's just-released draft pricing structure.

The proposal outlines a three-year, $400 million programme to tackle ageing electricity infrastructure in Dunedin, Central Otago and Queenstown.

Aurora Energy chief executive Dr Richard Fletcher said the proposed plan was about the "prudent investment that is essential to meet the needs of our communities now and into our future, to address the errors of the past and position the network for its future use''.

The proposal outlines estimated increases in residential line charges of up to $21 a month in the year ending March 2022, or $252 for the year, followed by up to $10 a month in 2023 and 2024 to fund a significant increase in network and related system upgrades and maintenance.

Dr Fletcher said the company acknowledged the price rise would be difficult for some customers. But the alternative was a continued deterioration in the safety and the reliability of the networks, he said.

"The duty of the current Aurora Energy team is to tackle the challenges created by historic under-investment head on and develop the networks to improve safety and reliability, cater for growth and prepare for the future.

"In Aurora Energy's case, low levels of investment in the intervening decades has helped keep line charges lower than the national average but has led to a gradual deterioration of the electricity networks which power our communities and economy.''

There was some scope to modify the proposal before it was submitted to the Commerce Commission in June 2020, but Dr Fletcher said it was important to be clear "that there are some key safety and renewal investments that simply have to be done''.

Aurora Energy's lines charges form about one quarter of an average residential power bill.

Across the entire network, the monthly total electricity bill was expected to increase on average by 18% for residential households.

"The $400 million three-year plan we are proposing reflects the prudent level of investment required to de-risk the network and position Dunedin, Central Otago and Queenstown Lakes for a future where the communities are heavily reliant on electricity,'' Dr Fletcher said.

As previously signalled, Aurora Energy's proposal will form part of its application to the industry regulator, the Commerce Commission, for a customised price-quality path (CPP), expected to take effect from April 1, 2021.

The final decisions on the scale of the plan and related pricing and reliability standards will be determined by the Commission, following customer feedback and further refinements by Aurora Energy.

The Commission's final decisions are expected in March 2021.

Aurora Energy customer and engagement general manager Sian Sutton said the team was committed to ensuring people had the opportunity to comment on the proposal prior to the final report going to the Commission.

"For our consultation we have simplified these complex issues so that all members of the communities we service can relate this investment back to their lives.

"Our online consultation website has all the relevant information people need to understand our proposal to develop an informed opinion and easily make a submission.''

Hard copies will be made available at the Aurora Energy offices, and at local councils throughout the region.

Drop in sessions are being held for those people preferring to speak face-to-face.

Aurora Energy encouraged customers to call 0800 22 00 05 for more information or visit the consultation website https://yoursay.auroraenergy.co.nz/

Comments

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So do we add this on to the $66.00 dollars per year per ratepayer (remember that claim) for the stadium given that fleecing Aurora of it's future capital investment led to this crisis in the first place.

Yes

Another example of the failure in leadership by the mayor and DCC. Rather than focusing on upgrading the aging infrastructure the "brain trust" is focused on green initiatives like bike lanes and electric bikes. Thousands of people all across Otago are living paycheck to paycheck, living hand to mouth; and now they will to dig deeper into their pockets to pay additional money because council lacks the cognitive skills to prioritize expenditures. When will citizens say "enough is enough? We demand accountability and transparency from our elected officials?" Anybody who pays rates knows the recent QV assessment means dramatic increases in their property rates. Even more money for them to waste! Now we are going to have to spend more money financing Aurora's infrastructure...when does it end? How much money do we have to pay the government? Elections have consequences and now we are facing the consequences for poor choices. Anybody who is a ratepayer needs to start keeping track of how they are wasting our money!

"Anybody who pays rates knows the recent QV assessment means dramatic increases in their property rates."

Wrong.

This myth continues to be wheeled out by the ignorant and uninformed.

Your rates will only go up if your property value increase is more than the average property increase (all other things being equal).

This has been publicised so often and still people either don't get it or refuse to understand it.

You might need to rethink that 'myth' Dunners. I have looked back on 5 years of statements to 2014. As the CV goes up, so does the amount the ratepayer pays. To add to that, the CV rate charged has also increased which further increases the amount the ratepayer will pay as part of the CV charge. The ORC rate charge has also increased. So in reality, We get a general increase in rates, then an increase in CV that adds to rates charged, then the ORC increase. We do indeed pay more as the CV goes up. This next increase with the latest CV's will be significant for everyone. At the current rate of 0.00333500 my CV charge will increase from the current $650.33 to $983.82 for next year. And that is without other rate increases such as rubbish, water,drainage and community services which will no doubt increase. As for your comment that 'average property increase', I have also checked on that, properties around my area have had CV increases by roughly the same amount in that same 5 years. So add power increases to this and no wonder we're all getting worried.

Yes we will be ripped off once again and once all the green initiatives are added power will double in price and there will be power cuts

Well, here we go, financing the half million dollar salary. Very expensive 'talent' apparently needed to run Aurora. While my power pole leans and swings in the wind.
Then we have the dramatic increase in QV on homes that further adds to our bills as if the usual rate increase wasn't enough. On the one hand wages finally start to catch up, ever so slightly, then almost immediately the wage gains are lost and all the expences that we have no control over go up and we're no better off than where we were. Hope just keeps getting sucked away.

Why not? We can then build a few more cycleways and bridges to no where with the money DCC receives from Aurora!

I just visited the "consultation website" - there is no more information on the cpp proposal than there is here.

You report the head spin doctor as saying "For our consultation we have simplified these complex issues so that all members of the communities we service can relate this investment back to their lives."

Let me translate that for your readers, "we are an open and transparent company, but sadly in a state of denial. We hope you will join us their so we will "simplify" the spin we feed you in the hope that we can get you to join us in this wonderful world in which we live.

Every reader should instantly be alerted by their bull crap meter when they hear phrases like this from the newly minted General Manager of pacifying the blissfully unaware.

This disaster is worse than any of the shocks Dunedin ratepayers have had to face since the first revelation in the 1980s that Dunedin's neglected water supply system needed $200 million to fix. Didn't Central Government subsequently legislate to compel district councils to fund depreciation out of current rates so that shocks like these would be avoided?
Or has this process been circumvented by the setting up of arm's-length Local Authority enterprises? Otherwise how could this appalling situation have happened again? Does the present mess suggest that this sort of situation can go on forever?
But worse may be to come - the present government is proposing to "smooth" out power bills which it is anticipated will bring further cumulative costs to many consumers and at the very same time as Aurora's punishing charges hit their stride.
Paradoxically it seems that most of this country's future electricity generation will be absorbed in shocking its hapless consumers. Answers please.

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