Aurora price hike lower than forecast for Central, Wanaka

Aurora Energy has announced its price hikes for this year as the lines company says it has aligned its revenue with a Commerce Commission draft decision.

The Dunedin City Council-owned company has to a small degree backed away from proposed significant price hikes for Central Otago and Wanaka after public consultation.

From next month the portion of a power bill Aurora is responsible for will increase 7.6% to 8.5% for users across the region this year.

Aurora chief executive Richard Fletcher said Aurora listened to the public and adjusted its cost-recovery pricing for 2021.

The increase in Central Otago and Wanaka regions would be higher than Dunedin, but lower than forecast, the company said.

It would reassess its cost-recovery programme for 2022, and public consultation on those changes would occur later this year, it said.

If power retailers passed on 100% of the increases to their customers this year, for a standard residential household using on average 9000 kilowatt hours a year, the lines component of yearly power costs would rise by $59.28 for Dunedin customers (up by 7.6% on 2020), by $110.28 for Central Otago and Wanaka customers (up by 8.5%), and by $74.40 for Queenstown customers (up by 7.6%), from April 1, the company said.

The final price for any customer would be determined by their chosen power retailer.

Higher prices in Central Otago and Wanaka were due to the higher cost per customer of supplying power to parts of the network with fewer people, but many infrastructure assets.

There were 56,000 customers connected in Dunedin on a network of 2375km, whereas there are 22,000 customers on the 2600km Central Otago network. In Queenstown, the number of customers is 14,500 spread over 971km.

The company planned to spend $523 million over five years, including an investment programme of $315.5 million on a programme of power infrastructure upgrades, which began in 2017 with the replacement of poles, lines and building new substations, it said.

About one quarter of all power poles had been reinforced or replaced, and the majority had been inspected, the company said.

The work on poles, after years of underinvestment in the network, would continue.

In 2020 Aurora spent $73.8 million on maintenance and improvements, and this year planned to spend a similar amount, it said.

New electricity infrastructure planned included a new Dunedin Harbour crossing cable and line and pole and sub-station upgrades in Central Otago and Wanaka.

In Arrowtown, Aurora would renew the ring network, a transmission system for Arrowtown, Coronet Peak and Dalefield, the company said.

Aurora applied to the Commerce Commission to increase household bills in Otago to fund a major network investment to upgrade its ageing network.

The overall revenue Aurora can bring in is decided by the commission.

The commission’s final decision is expected March 31 with new prices to be in place the following day. 

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