Friday, 13th November, 2020

Open letter from Commerce Commission regarding Aurora Energy. Please note public sessions are being held to discuss the decision - details below.

 

Today we have released our draft decision on our assessment of Aurora Energy’s plan to fix its network. 

We are proposing that Aurora can spend a maximum of $523 million over the next five years to replace failing infrastructure and run its network. This is a reduction of $86 million (14%) on what Aurora proposed.

We are also proposing to set targets for power outages and interruptions on Aurora’s network at levels that reflect its actual performance over the past five years.

In addition, we propose to require Aurora to publish an Annual Delivery Report and hold public meetings to detail exactly what work it has undertaken broken down by region. We are also proposing that Aurora reports more clearly on service quality, including how it calculates its regional prices.

While our draft decision would lower Aurora’s expenditure and substantially reduce the increase in lines charges compared to its plan, we expect the impact on electricity bills would still be significant.

We estimate that lines charges alone could rise by between $3 to $13 per month for the majority of Aurora’s residential customers from 1 April 2021, depending on usage and where they live. This would increase to between $20 to $73 per month by 2026. To help mitigate the bill shock, we have proposed to smooth Aurora’s revenue over the five-year investment period. This would limit Aurora to increasing the maximum revenue it can collect from its customers by no more than 10% a year.

We understand the disappointment and anger Aurora’s customers hold about the position the business is in. Aurora has nevertheless made its case for urgent and ongoing investment to replace old and failing assets in its network. Without it, the network will continue to deteriorate, safety incidents will increase, and its customers will experience more frequent and longer outages.

The package of measures we are proposing are focused on the long-term benefit to Otago communities and will help improve Aurora’s performance over time.

We encourage your feedback on our draft decision before we make our final decision in March 2021.

Have your say

Our draft decision is open for consultation until 10 December 2020.

A summary of our draft decision, consumer fact sheets, the full reasons paper and a template submission form to provide us with your feedback are all available at www.comcom.govt.nz/aurora under the ‘documents’ tab.

 

We are also holding public meetings in Alexandra, Cromwell, Wanaka, Queenstown and Dunedin between 23 November and 1 December. More details can be found at www.comcom.govt.nz/aurora.