Aurora to pay $5m for quality breaches

AURORA Energy has been ordered to pay almost $5 million for breaching its network quality standards with an excessive level of power outages from 2016 through 2019.

But due to the Covid19 outbreak the Dunedin City Councilcontrolled lines company did not have a specific timeframe for payment of the penalty imposed, a Commerce Commission decision this week said.

Commission deputy chairwoman Sue Begg said Aurora did not adequately respond to recommendations stemming from the commission’s 2014 warning to it for contravening its quality standards in the 2012 assessment period.

‘‘Aurora’s previous management and board were well aware of the deteriorating state of its network but failed to take action,’’ Ms Begg said.

As a regulated monopoly under the Commerce Act, Aurora is subject to pricequality regulation that sets limits on the total revenue it can earn, as well as the level of outages that can occur on its network.

The penalty amount imposed by the High Court was jointly recommended by the commission and Aurora.

The penalty for the 2016 year was close to the maximum that could be imposed under the Act, while the penalty for 2018 and 2019 was lower, reflecting the fact that by that point, Aurora had begun to address the sources of its failures.

In her judgement, Justice Jillian Mallon said: “The key consideration for the 2016 and 2017 assessment periods is the level of risk taken by Aurora, having been warned and provided with a report recommending actions that were not taken.

‘‘A high penalty is warranted for deterrence purposes in such circumstances. I also agree that Aurora’s culpability was significantly lower in the 2018 and 2019 assessment periods because Aurora was taking steps to address its historic underinvestment and to improve reliability.”