Aurora Energy was fined $4.9 million for persistent power outages in its Otago distribution area after poor maintenance and deferred capital spending caused consumers economic losses in excess of eight million dollars.
Owned by Dunedin City, Aurora Energy Ltd distributes power across the Otago region. Commerce Commission took legal action because of the frequency and duration of power outages. Lines companies are in a monopoly position. Service performance is monitored by Commerce Commission against agreed price/quality criteria. Aurora was fined after failing to meet industry standards over a three year period ending 2019. It was criticised for failing to properly maintain transmission infrastructure and for failing to properly plan and carry out tree trimming programmes. Over a six year period, $36.7 million budgeted for asset maintenance was left unspent. Poor record keeping meant Aurora’s data did not match what contractors found in the field.
A fine of $4.9 million negotiated between Commerce Commission and Aurora was approved by the High Court. Payment was to be made immediately. The High Court suspended immediate payment while business activities were affected by the covid-19 pandemic.
Commerce Commission v. Aurora Energy Ltd – High Court (23.03.20)
20.063