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Power Price increase for 90,000 in the South Island – Have your say

Tuesday, June 16, 2020
Aurora set to increase Power Prices in South Island

 

Power bills look set to increase for 90,000 homes, farms and businesses in Dunedin, Central Otago and Queenstown Lakes under an application to the Commerce Commission from Aurora Energy.

Why is Aurora applying to increase prices?

Aurora has applied to increase its prices to fund a $383 million three-year plan to address safety and reliability issues on its electricity lines network.

Aurora says its investment plan is to address historic under-investment in its network resulting in a gradual deterioration of its equipment. In recent years this has caused a higher number of safety incidents and an increasing number of unplanned power cuts.

Aurora Energy owns and operates the poles, lines and other equipment that distribute electricity from Transpower’s national grid to 90,000 homes, farms and businesses in Dunedin, Central Otago and Queenstown Lakes. As it is a monopoly and its consumers have no choice but to connect to its network, the Commission regulates the total amount of revenue it can earn from its consumers and the quality of service it must deliver. If Aurora wants to significantly invest more in its network it must submit an investment plan to the Commission. Learn more here

When could the increase come into effect?

Aurora is proposing significant price increases from April 2021.

How much could my power bill go up?

Aurora’s proposal estimates the 3-year increase in the total average residential power bill is between 10.6 and 16.7%, or an additional $20-30 a month*, depending on what region the customer is in.

How will the Commerce Commission make its decision?

“Undoubtedly, significant investment is needed in Aurora’s network. Our role over the coming months is to decide the maximum revenue it should be allowed to recover from its consumers to carry out its plan and over what period,” Associate Commissioner John Crawford said.

“We are acutely aware of the impact COVID-19 has had on consumers in Dunedin, Central Otago and Queenstown Lakes. As part of our assessment we will consider what options there are to manage price shocks, while ensuring Aurora’s investment plans are for the long-term benefit of their consumers.”

The Commission will formally consult over the coming month. A draft decision will be released before Christmas, with a final decision to be made in March 2021. Consumer price increases will take effect from 1 April 2021.

Have your say on the price increase

The Commerce Commission says it welcomes feedback on Aurora’s final proposal from consumers and other stakeholders. This can be emailed to feedbackauroraplan@comcom.govt.nz

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* A copy of Aurora’s investment application, the expert’s report and background information on the project is available at  www.comcom.govt.nz/aurora. Proposed pricing information sourced from Aurora’s customised price-quality path application, Appendix K paragraphs 815, 817 and 820.

 

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