Power company Aurora narrowly avoided court action over outages

Aurora was ordered by the High Court to pay a penalty of almost $5 million for not complying with quality standards from 2016 to 2019. Photo / Duncan Brown, File

Otago power company Aurora Energy has narrowly avoided court action for again failing to keep outages in check.

The Commerce Commission said it seriously considered taking the lines company to the High Court for breaches in 2020, “considering the seriousness of the conduct that led to this situation, and the extent of the detriment to consumers of a prolonged period of contraventions”.

It warned the company it must continue to deal with underlying reliability problems.

However, the commission did not go beyond issuing a warning, because of reasons that included Aurora having already made significant investment to remedy the situation.

The commission said the 2020 problems were largely inevitable after historical underinvestment by Aurora in its network and the company had already been punished for that.

In March 2020, Aurora was ordered by the High Court to pay a penalty of almost $5 million for not complying with quality standards from 2016 to 2019.

Lines company Aurora head office in Halsey St, Dunedin. Photo / Gerard O'Brien, Otago Daily Times

The energy company conceded at the time it had failed to exercise the degree of skill, diligence, prudence and foresight that would reasonably be expected of it.

It was also warned in 2014 for failing to comply with quality standards in 2012.

Aurora is owned by the Dunedin City Council and it distributes electricity to more than 92,000 homes, farms and businesses in Dunedin, Central Otago and Queenstown Lakes.

The commission accepted Aurora had taken steps to dramatically adjust the company’s direction and structure from about 2017.

Aurora Energy chief executive Dr Richard Fletcher said yesterday’s decision by the commission drew “a final line on the company’s past performance and reflects the significant investment in the network that the company has delivered over the past four to five years”.

Fletcher said 2020 was a transitional year between a past enforcement process and the implementation of a five-year investment programme.

Aurora CEO Richard Fletcher. Photo / Peter McIntosh, Otago Daily Times

The company had been issued with a “retrospective warning notice” over “a legacy issue”.

“I’m pleased to say we’ve met all our commitments in the 2021 and 2022 regulatory years and we will continue to meet them going forward,” Fletcher said.

The commission said the impact on Aurora’s consumers from breaches was “still very real”.

“We note that, if Aurora contravenes a quality standard again in the future, this warning will be a relevant factor that may lead us towards a stronger enforcement response.”