Queenstown Lakes District (QLDC) councillor Quentin Smith says the community should be “outraged” at Aurora Energy’s proposed $400M investment plan, which would see hefty power price increases for the Upper Clutha. 

Aurora supplies electricity to 90,000 homes, farms and businesses in Queenstown Lakes and around Otago. Historic under-investment in its network has resulted in a deterioration of its equipment that will require hundreds of millions of dollars to rectify.

Under Aurora’s proposal, steep hikes in households’ power prices would help pay the investment bill - and Quentin said the Upper Clutha should not bear the brunt of the cost. 

The proposed resolution, sought by the Dunedin City Council (DCC) owned company, isn’t good enough, he said.

“The DCC and in turn residents of the DCC have been financially benefiting from taking funds from the company while it failed to maintain our network in the outlying districts…” he said. 

“The Upper Clutha faces nearly 50 per cent greater increase and, in some cases, faces nearly double the line charges than what Dunedin residents are or will be required to pay, residents who have already benefited (through rates) from the undue takings from the company.”

Quentin Smith. PHOTO: QLDC 

Aurora’s proposal made headlines in November last year when it was revealed residential line charges could increase, on average, by $21 per month in year one, followed by increases of $10 per month in years two and three. 

Dunedin, it was revealed, would have lower increases than other communities.

QLDC mayor Jim Boult said the hikes were in large part a result of paying highly inflated dividends to Dunedin City Council over years and if the money had been used more wisely the local community would not be facing the possibility of significantly larger power bills. 

Now more than ever, the proposed outcome is unacceptable, Quentin said.

“Particularly in these times [post COVID-19] where few can afford a 24 per cent increase in power bills and the actions of Aurora and DCC are grossly unreasonable and unfair.”

He said the DCC should return any undue takings from the company and reinvest them: “and then, and only then, should they see a balanced and fair increase in the costs.”

Aurora will submit its proposal to industry regulator the Commerce Commission, which this week released a statement about its upcoming evaluation.

“It’s clear that significant investment is needed in Aurora’s network. It’s our role to scrutinise Aurora’s plan to decide the maximum revenue it should be allowed to recover from consumers to carry out its plan and over what period of time,” Commerce Commission associate commissioner John Crawford said.  

“We understand that now, more than ever, household incomes will be strained, especially in light of COVID-19. Many consumers will be struggling to pay their bills while needing a reliable electricity supply. A key consideration for us in our upcoming assessment is balancing the cost to consumers with the urgent need to fix the network.” 

Residents can have their say on the proposed changes via the Aurora website and, soon, the Commerce Commission. An introductory paper, fact sheet on the investment plan, and more information on the project can be found here.

The Commission is due to make its final decision on the investment plan in March 2021, with consumer price increases taking effect from April 1, 2021.