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The Electricity Authority has deemed Aurora Energy’s regional pricing strategy to be fair, despite a chorus of disapproval from across Central Otago and the Queenstown Lakes districts.
In a statement released yesterday Electricity Authority director of transmission pricing methodology Rob Bernau said the authority had responded to concerns raised by Aurora consumers about how the lines company’s prices balanced between its coverage regions.
"These concerns come in the context of likely substantial price increases on Aurora’s network as a result of its application for a new price path to the Commerce Commission."
Mr Bernau said the authority had checked Aurora’s regional pricing and an independent review of Aurora’s approach to setting regional prices was commissioned.
Specifically, the review asked whether it was consistent with the authority’s distribution pricing principles.
That review found Aurora’s overall approach to regional distribution pricing was "sound and largely reflected the differing costs across its three regions", he said.
There was room for improvement.
The review found some areas where Aurora could ensure future costs were shared in a way that more closely reflected the cost of providing services to each region, he said.
The authority was pleased to see Aurora had already committed to making immediate changes to its regional distribution pricing by April 1, 2021, with more to come by April 2022.
"We will work closely with Aurora as they make these changes, check they are tested and encourage Aurora to keep its community regularly updated about the changes."
This comes after the Commerce Commission again started a consultation process on two proposed technical changes to its draft determination on Aurora Energy’s proposal for a customised price-quality path (CPP).
In November 2020, the commission published and consulted on its draft decision on Aurora’s CPP proposal.
Since publishing, the commission identified two technical changes it proposed to make to the draft CPP determination.
The two technical changes are the only areas the commission is re-consulting on.
Submissions closed on February 18.
The lines company owns and operates the poles, lines, and other equipment that distribute electricity from Transpower’s national grid to more than 90,000 homes, farms, and businesses in Dunedin, Central Otago, and Queenstown Lakes.
Aurora Energy is a wholly owned subsidiary of Dunedin City Holdings Ltd, owned by the Dunedin City Council.