Alpine may face penalties

Alpine Energy could face penalties after the Commerce Commission completes an investigation into an error which saw the lines company overcharge customers by millions of dollars.

Commerce Commission general manager of infrastructure regulation, Andy Burgess, said it was investigating Alpine Energy’s “disclosure errors and any resulting overcharging of customers”.

“Depending on the result of the investigation, there are a range of steps the commission might take, including taking no action, issuing a compliance advice or warning letter, accepting enforceable undertakings, or bringing proceedings,” Burgess said. “As this is an ongoing investigation, we are unable to provide any further comment.”

Burgess’ comments follow an admission by Alpine Energy on Tuesday that an administrative error had led the lines company to overcharge customers over a nineyear period to the tune of approximately $2 million a year.

Newly appointed Alpine Energy chairperson Melissa Clark-Reynolds fronted for the company on Tuesday and said error had been discovered eight months ago during an audit.

The Commerce Commission had been advised at that time, and the error was down to a technical error, rather than dishonesty, Clark-Reynolds said.

She also confirmed the board would not pay an interim dividend for the three months ended March 2024.

Alpine Energy is owned by four shareholders: Timaru District Council’s holdings company, Timaru District Holdings Limited (TDHL), owns 47.5%, LineTrust South Canterbury owns a 40% stake, the Waimate District Council 7.54% and tje Mackenzie District Council 4.96%.

All four shareholders say they had been made aware of the error late in 2023.

Waimate District Council chief executive Stuart Duncan said the council had expressed its disappointment to the company’s board and would have preferred to have been informed sooner.

Duncan said the council was first notified of the error late in 2023.

“It would have been better to be told earlier, however, we understand that this matter took time to quantify,” Duncan said.

He said the council had requested regular updates from the company over the matter going forward.

A Mackenzie District Council spokesperson said it had also been made aware there was “an issue” late in 2023 and had been updated in the past two weeks.

“Any loss of dividend this financial year will result in an unfavourable variance against budget for the year to 30 June 2024,” the spokesperson said.

LineTrust South Canterbury chairperson Mike Downes said they were also informed late in 2023.

Downes said he believed they have been informed in a “timely manner” given the exact details and impact of the error was still being assessed.

He said non-payment of the interim March dividend would result in “less funds available for distribution to consumers by way of rebates”.

He said they LineTrust had also requested Alpine Energy to keep it up to date with developments.

Timaru District Holdings Ltd general

manager Frazer Munro said the council’s holdings company was also informed late in 2023.

As of Wednesday, Munro said TDHL was still “modelling the impacts” of Alpine’s decision not to pay the interim dividend for the three months to March.

Munro said TDHL had also asked to be kept up to date on the matter.

“We will continue to work collaboratively with our fellow shareholders and the Alpine board of directors to get the best outcomes for our stakeholders,” Munro said.

Timaru District Council group manager corporate and communications Stephen Doran said councillors were briefed on the matter by TDHL on Tuesday afternoon, prior to the announcement by Alpine Energy.

A spokesperson for the Electricity Authority said Alpine Energy had notified it of the error yesterday.

The authority and the Commerce Commission have different roles in respect of lines companies, the spokesperson said.

“The authority is responsible for overseeing distributors’ interactions with other industry participants and ensuring they comply with the requirements of the Electricity Industry Participation Code 2010.

“The Commerce Commission sets and enforces information disclosure requirements for distributors.”

They said while the error relates to information disclosure statements, “we are interested in the process to rectify the situation so that consumers have trust and confidence in the broader electricity system and its markets.”