Aurora Energy does not need to spend as much as it wants on staffing and a range of other areas to the tune of $86 million, the Commerce Commission says.
And the regulator has confirmed, after delivering its draft decision on Thursday on what Aurora could charge customers, that by 2026 some high-use customers in Central Otago and Wanaka will be charged more than $876 a year more than their current bills.
The commission said Aurora had asked to spend $253 million in operating expenditure over five years, which the regulator decided was $45 million more than it needed.
". . . we do not consider all of Aurora’s forecast spending was efficient or necessary for the size of its business," the commission said in its draft decision.
The amount Aurora was spending on its operations room in Dunedin overseeing the network and other network support functions was $11 million more than North Island distributor Powerco was spending on the same area. That is despite that company’s network being four and a-half times longer than Aurora’s.
The commission said Aurora should be spending $55 million on its system operations room and network support, rather than the $80 million the lines company asked to spend.
What Aurora was spending on staffing was also $13 million higher than what the commission found it needed.
The lines company was also overshooting in its forecast for what it would spend on vegetation management by $5 million, the commission found.
The commission was able to find $41 million in savings in capital expenditure from what Aurora had forecast to spend on network growth.
"The major reductions we have identified largely relate to growth and network security projects that we consider may not be needed, or can be deferred, due to the demand uncertainty stemming from Covid-19, along with some general efficiency savings," the commission said.
The commission also confirmed some households in Central Otago and Wanaka where there was high usage will pay more than the estimated $73 extra a month, or $876 a year, in 2026.
"...absolutely there will be some large users in Central Otago who would pay above that $73 extra a month in 2026 if their electricity use remains at current levels," a spokesman said.
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Hard to pay an extra $73 a month when after bills you are already left with only $30 for groceries , food , hygiene products , rubbish bags etc etc. That would almost double my power bill while leaving me almost nothing to actually live on