$200m increase forecast

Aurora infrastructure spending

SPENDING on Aurora Energy’s ageing electricity network is forecast to jump by more than $200 million.

This is on top of increases of hundreds of millions since 2015.

The latest increase has been described as a ‘‘slowmotion train wreck’’.

But Mayor Dave Cull is urging caution, saying the figures remain a draft and will be ‘‘nothing like’’ what is forecast by the time they are finalised.

The figures are contained in an interim asset management plan published by Aurora, which forecast $930 million in spending capital and operational spending, including renewals, over the next decade.

That would represent a $210 million jump since just last year, when Aurora estimated it would spend $720 million over the coming decade.

That was, in turn, a big increase on 2015, when the company was estimating a $360 million spend, and 2016, when the figure had risen to $420 million.

Mr Cull said yesterday the ‘‘caveat’’ was that the figures were part of an interim document, and Aurora’s full plan would not be finalised until August.

The Commerce Commission had granted Aurora an extension on completing the full plan, to allow time for an independent review of the com pany’s electricity network to shape the document.

‘‘What they actually do will be decided in August,’’ Mr Cull said.

‘‘What they come up with as a final asset management plan simply can’t be known until that review is done.

‘‘I don’t think that number represents what they intend to spend. I don’t expect the number to be anything like that.’’

Most councillors contacted late yesterday were unaware of the interim plan or its contents, but Cr Lee Vandervis said he had read it and was ‘‘surprised and shocked’’.

‘‘It keeps going up.

‘‘It’s just a slowmotion train wreck that’s been happening for years,’’ he said.

An Aurora spokesman responded to Otago Daily Times questions with a written statement which also urged caution over the figures.

The company had signalled its intention to ‘‘significantly increase’’ its spending on ageing network assets last year, the spokesman said.

The latest interim plan, while updating the figures, focused more on ensuring figures for the next few years were ‘‘robust’’, he said.

Overall, it represented some ‘‘emerging views’’, the Aurora spokesman said.

‘‘The longer term investment forecast . . . has been updated, but is less certain.’’

The latest figures came two years after public concern over the safety of Aurora’s ageing network prompted the company to invest in a $30.25 million programme to replace close to 3000 power poles.

Suggestions by a former staff member that Aurora faced a $1 billion bill were dismissed as ‘‘exaggerated’’ by the company at the time.

Aurora did not respond when asked yesterday if it still considered the claims of a $1 billion bill to be exaggerated, or if the forecast increased spending would mean more debt for the company.

Aurora has already signalled it would seek a customised price path in mid2020, to increase the distribution line charge component of customers’ electricity bills, in order to help fund investment in the network.

A separate investigation into Aurora’s breaches of quality standards — including the frequency and duration of power outages — in the 201516 and 201617 years, was also ongoing, a Commerce Com mission spokeswoman said yesterday.

No timeline could yet be given to complete the probe, but a lines company found to have breached quality standards — for example through asset degradation — could face prosecution, she noted.

‘‘Our investigation into Aurora is looking to establish the reasons for the noncompliance, including whether there has been deterioration in Aurora’s network which has contributed to the noncompliance.’’