We are sorry, chair says
A call has been made to sack the entire Alpine Energy board over an overcharge error costing an estimated $19 million, but the new chairperson says that would be impracticable.
“I don’t think that will help the situation at all,” Alpine Energy board chairperson Melissa Clark-Reynolds said.
On Tuesday, the South Canterbury community-owned lines company, admitted it had overcharged customers to the tune of approximately $2m a year over a nine-year period.
Clark-Reynolds replaced Warren McNabb as chairperson after he resigned on Saturday.
McNabb, who lives in Blenheim and also chairs the Port Marlborough board and the national Independent Electricity Generators Association, has been approached for comment.
Clark-Reynolds said she became chair “a couple days ago to work for the community and clean it up. It needs to be”.
“I do stress that we are sorry and are seeking resolution. At this point, that seems far more important than looking to lay blame on staff who don’t work here anymore.”
Chairperson of the Fairlie and Districts Residents and Ratepayers group, Robert Herbert, said the issue would be discussed by members.
“But on a purely personal level, I am concerned that they kept this quiet and didn’t tell anyone that it had happened.
“They just carried on charging their captive audience for eight months without doing anything about it.”
On Tuesday, Clark-Reynolds said Alpine Energy first became aware of the error after an audit in August last year.
The company fessed up publicly on Tuesday, releasing a statement admitting it had overcharged the lines component of electricity bills for nine years which it put down to an admin error.
“Perhaps the whole board should be sacked,” Herbert said.
Questioned why the audit had picked up the error in August, and not sooner, Clark-Reynolds said the same auditor had been used through the period the error ran and that had not been picked up due to the use of two spreadsheets.
“In 2013, there were one set of spreadsheets for the financial system for the CFO (Chief Finance Officer) and finance, and another set for the regulatory team.
“In 2014, an error in the regulatory team spreadsheets was not picked up.
“It couldn’t happen now; we’ve got the CFO over the entire thing.
“I’m not going to put the previous CEO, Andrew Tombs, under the bus. But the change occurred in the last two years, and the error (was) picked up when the new CEO was appointed.”
Tombs retired in October 2022 after 13 years with the company.
Caroline Ovenstone was appointed chief executive in November 2022, having held the role in an acting capacity prior to that. At the time, Ovenstone had already worked for Alpine for three years as chief financial officer.
Tombs is now St John Northern Territory chief executive in Australia.
Clark-Reynolds said she was confident such an error would not happen again.
“We’ve changed the systems in the organisation.”
Options were being considered for compensation, she said.
“It will need Commerce Commission approval and it will take months; we won’t sort it out in a few days.”
On Wednesday, representatives of the four shareholders - Timaru District Holdings Limited (TDHL), LineTrust South Canterbury, and the Waimate and Mackenzie district councils told The Timaru Herald they had been made aware of the matter late in 2023. None gave a more precise timeframe.
Yesterday, TDHL chairperson Mark Rogers, speaking on the matter for the first time, said he, and his board, became aware Alpine Energy was overcharging customers in August last year.
“At the time there were no figures available.
“Since becoming aware of the level of the overcharging I took that matter up with (former) Alpine Energy chairman Warren McNabb, who has since resigned.”
McNabb, who was a TDHL appointee, was appointed to the board in October 2016.
“TDHL believes it was appropriate for the Alpine Energy chair to resign over this matter,” Rogers said.
As a shareholder, TDHL has expectations of directors in discharging their governance duties, Rogers said.
“TDHL hold their appointees to account, while being cognisant of individual circumstances within a framework of collective responsibility.”
TDHL’s current appointees to the board are Clark-Reynolds and Rebecca Keoghan. The other three directors are Karen Coutts and Kevin Winders, who are appointees of LineTrust South Canterbury, and Linda Robertson who is the appointee of the Waimate and Mackenzie councils.
Rogers said as the Commerce Commission is investigating, TDHL has no further comment to make.
On Tuesday, Commerce Commission general manager infrastructure, Andy Burgess, said depending on the investigation outcome, the commission could take no action, issue a compliance advice or warning letter, accept enforceable undertakings, or bring proceedings.
Since the financial blunder, Alpine Energy has employed Wellington-based government and public relations consultancy, Silvereye, to handle its public relations.
“They will assist us, you can still talk to me,” Clark-Reynolds said, adding “they’re just passing on advice.”