Commissioner Vhari McWha said the commission was seeking feedback on its draft decision to allow the Dunedin City Council-owned lines company to recover up to $663.7 million over four years from 2026 to 2030.
"We are conscious of the effect on electricity bills across Otago, and we’ve ensured this spend remains reasonable and limited to what’s necessary to give consumers a safe and reliable network now and into the future," Ms McWha said.
"It means Aurora can continue to renew ageing assets on its network while also meeting significant growth in demand for electricity in its regions."
Aurora said yesterday its initial view was the draft decision outlined a level of cost savings that would "seriously inhibit" its plans to support economic growth and improve network resilience.
Advocates for those struggling to pay bills said high electricity prices were already having a significant effect on some in the community.
Ms McWha said the draft decision meant the average household electricity bills in the areas Aurora served could increase by about $10 a month next year and about $3 a month each year thereafter.
Aurora’s customised price-quality path (CPP) was put in place in March 2021 to allow the company to recover a set amount of revenue from customers over five years as it repaired and upgraded its network.
However, the company’s present revenue limits were due to expire in March next year, and new revenue limits would be set under general arrangements that applied to other price-quality regulated lines companies, Ms McWha said.
"While Aurora has made significant progress during the CPP on the safety of its network, its investment catch-up was always planned to occur over a longer period.
"In Aurora’s CPP application, it anticipated investment would not return to a steady-state level until around 2030."
In its draft decision, the commission had removed $16m related to projects with potential to be deferred by alternative solutions such as residential solar, Ms McWha said.
Aurora Energy chief executive Richard Fletcher said the company would provide a formal response to the commission’s draft decision.
"However, our initial view is that the level of operating cost efficiencies referenced by the commission would be impracticable to achieve and, if not corrected in the final decision, would seriously inhibit the company’s ability to deliver its published plan and improve network resilience.
"It would also constrain the planned development of the company’s network and operations to support customers’ electrification transition and the economic growth of our operating regions."
The draft decision appeared to be based on high-level benchmarking information from 2018 and did not appear to have been updated to reflect the company’s current operating environment, Mr Fletcher said.
He said the company was proud of what had been achieved over the past five years and found it "very disappointing" the commission had not raised concerns about the efficiency of the company’s operating position in any of the formal annual progress reviews it had undertaken.
Dunedin Budget Advisory Service manager Andrew Henderson said there was a lot of pressure on low to middle-income households at the moment — and the draft decision by the Commerce Commission "seems to fly in the face of that".
The budget advisory service, which administered the Dunedin City Council’s Consumer Electricity Fund, was processing between 80 and 90 applications each month from people struggling with the cost of electricity.
"That’s probably the tip of the iceberg.
"It’s just pressure from all angles on low to middle-income households," Mr Henderson said.
A Grey Power Otago committee member, who asked not to be named, said people were already distressed due to increases in electricity bills.
A woman had recently called Grey Power’s South Dunedin office in tears after signing up with a new electricity supplier and receiving a power bill of $400 for her two-person household.
Feedback on the draft decisions closes on August 22.
A final decision is due to be published by the end of November.
