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The Commerce Commission’s existing investigation into breaches by Aurora Energy should be broadened to include the recent fallen poles in Alexandra, Vincent Community Board member Russell Garbutt says.
Mr Garbutt said the investigation needed to look into Aurora’s "deeply flawed" programmes and actions.
He is also concerned customers will now pay higher lines charges because of Aurora’s actions.Mr Garbutt has been communicating with the commission this year and in August received a letter from commission chairman Dr Mark Berry that said for the past two years Aurora had not complied with the "standards of quality that we have set for it".
"As a result, we are investigating the nature of these quality standard breaches and the conduct that may have led to them. As always, with an investigation of this nature, this could potentially lead to court action," Dr Berry said.
Another commission spokesman said that under Section 87 of the Commerce Act, each breach of quality standards was liable for a financial penalty of up to $5million. The High Court traditionally heard these cases. In addition to a financial penalty, the commission and private parties could also seek compensation for loss or damage caused by the breach, the spokesman said.
Mr Garbutt wants the commission to look more closely at Aurora and Delta’s financial decisions, after being told by the commission’s regulation branch compliance and performance analysis manager, Simon Wakefield, the commission did not intend to "closely scrutinise the actual business decisions or transactions" made by Delta, DCHL [Dunedin City Holdings Ltd] and/or DCC [Dunedin City Council] which may have led to Aurora facing financial pressures.
Mr Garbutt said there was "widespread community concern" in Alexandra about the three power poles that fell in just over three months, in Eureka, Chicago and Ventry Sts.
He said Aurora’s testing programme and pole replacement programmes were "deeply flawed" but, "perhaps even more importantly", Aurora’s "incompetence and financial ineptitude" were now going to be "fixed" by a huge increase in line charges. Aurora announced earlier this year its intention to apply to the Commerce Commission for a customised price-quality path (CPP), which would allow it to increase its lines charges for consumers to fund upgrades to its network.
"Aurora has, in conjunction with its owners, spent the money that should have been spent on infrastructure maintenance on a variety of other things, including subvention payments to loss-making companies also owned by the Dunedin City Council," Mr Garbutt said.
"Now the Aurora customers ... will be ... effectively paying twice, while at the same time our communities are being placed in clear danger by failing poles and other infrastructure."
Mr Garbutt said it was a "huge concern" the three poles that fell in Alexandra had not been red-tagged and that proved that "Aurora’s testing regime cannot be relied upon and gives false results".
"The Deuar testing system [used by Aurora] has been questioned in the past by independent reports who noted that many basic questions remain unanswered about its effectiveness and accuracy. Any testing regime that passes a pole as suitable for purpose which then snaps off at or just below ground level in my mind is basically flawed."
When approached for comment earlier this week, Aurora Energy chairman Steve Thompson said "significant progress" had been made in the past 12 months to remove the risk of ageing power poles in Alexandra and more work was planned.
Another Aurora spokesman said Aurora had its pole-testing methods independently assessed and verified by engineering specialists in the utility sector earlier this year.
"Independent verification confirmed that our pole-testing and identification methods are robust, consistent and meet the required regulatory standards. We have also supported our pole-inspection service with independent industry experts."
Aurora was awaiting the results of the commission’s inquiry, the spokesman said.
At a glance
Russell Garbutt’s concerns. —
• Aurora’s pole testing system is "deeply flawed".
• The Commerce Commission is not considering the financial decisions that led to deterioration of the pole network.
• Consumers will end up paying higher power prices because of Aurora’s intention to apply to increase line charges.
The Commerce Commission says. —
• Aurora has not complied with quality standards for the past two years.
• The commission is investigating the breaches and what led to them.
• This could lead to court action.