Green light for power quake plan

Households in Wellington, Hutt Valley and Porirua face higher power bills after the lines company that services the areas received the green light to spend tens of millions of dollars to prepare the network for earthquakes.

The Commerce Commission, which made a draft decision in February, has approved an application by Wellington Electricity to spend an extra $31 million on its major earthquake plan.

In December, Wellington Electricity made an urgent application to the commission to increase its prices to fund earthquake strengthening of its substations, as well as buying emergency equipment and critical spares.

The plan, which is supported by Wellington City Council, would see an extra $18 to $23 added to the annual power bills of more than 160,000 households.

The money would be used to buy emergency hardware, mobile substations, improved IT and communications systems and even strengthen unreinforced masonry on several buildings.

The application followed a Government Policy Statement issued after the November 2016 Kaiko¯ ura earthquakes, which highlighted the capital city’s vulnerability to seismic activity.

The statement outlined the Government’s expectation that the Commerce Commission consider options to allow Wellington Electricity to recover resilience-related expenditure that was not anticipated when its price limits were set in 2014.

The final decision was essentially unchanged from the draft decision.

‘‘We remain satisfied that the expenditure is needed and has been costed appropriately to ensure Wellington’s network is better prepared to withstand a major earthquake,’’ said telecommunications commissioner Dr Stephen Gale.

The commission did make it clear that if Wellington Electricity does not complete the work, money provided would be returned to consumers through lower power prices, Gale said.

‘‘While the application has been fast-tracked, I want to reiterate that this is a one-off in light of the unique set of circumstances and the importance of the country’s capital city being able to function to the fullest extent possible during and after a major emergency.’’

Wellington Electricity chief executive Greg Skelton said the company was keen to get cracking on the work.

Modelling suggested that if a quake occurred tomorrow, 60 per cent of power supplies to Wellington, Hutt Valley and Porirua could be lost immediately, and that up to 35 per cent of the local network could still be disrupted weeks to months later.

‘‘It’s all about getting the community connected again as quick as possible,’’ he said.

City council chief resilience officer Mike Mendonca said he was pleased to see electricity come into line with the resilience work on water, which had been leading the way.

‘‘It’s not the be all and end all – but it is a good start,’’ he said.