KEY POINTS:
An energy lobby group says Vector Energy should compensate businesses in the Auckland retail area of Newmarket, which lost money in a two-hour power cut on Thursday.
About 1800 Vector customers lost power in Newmarket and parts of Parnell about 12.30pm, which affected many businesses relying on lunchtime trade.
It came two weeks after a larger Transpower outage which affected a larger area from Newmarket to Mt Wellington.
Major Electricity Users Group executive director Ralph Matthes said it was ironic that a cut that resulted in financial losses to Newmarket businesses came at a time Vector announced a $90.8 million half-year profit.
"Consumers don't mind paying Vector and other electricity line businesses for services and a reasonable return to the line company for assets employed," Mr Matthes said.
"But if service is unreliable then the line monopoly cannot expect to keep earning good profits. Vector should pay adequate compensation to those customers that lost power."
Mr Matthes said commercial incentives for Vector and other line companies to deliver on prescribed levels of services were needed, and they should be made liable for damages if they failed to deliver. This was normal practice in competitive markets.
"The line monopolies are not going to voluntarily go down this route," Mr Matthes said.
"Hence we need quality regulation by the Commerce Commission and Electricity Commission to facilitate the transition to a more balanced commercial framework so that if power goes off, the line companies pay the cost.
"In the wider context of improving the quality of regulation of monopoly businesses, we are heartened by comments reported in the media that the chairman of Vector said a small country like New Zealand needed a regulator like the commission."
Vector Energy chief executive Simon McKenzie said nobody would receive compensation.
"We pay a service payment to [customers] if they've been out for 2 hours, but with regards to wider compensation, that is something that we do not make payments for," he told Radio New Zealand.
There was incentive for Vector to perform through regulations to deliver quality standards from the Commerce Commission. "If we don't meet the standards set by the regulator then clearly we can be controlled for services and that's something we definitely wouldn't want."
Mr McKenzie said Vector Energy said the outage was caused by a fault in one of its cables and was totally unconnected to the Transpower outage two weeks ago.
Vector could never guarantee 100 per cent reliability, and neither could any energy company worldwide.
"Our focus is on getting customers back on as quickly as possible."
Newmarket Business Association general manager Cameron Brewer said power cuts were especially difficult, given the dependence on eftpos and other electronic transactions.
"One of the big problems is no one carries any cash these days so business transactions come to a complete halt.
"We're telling retailers to keep an old zip-zap machine under their counters because, sadly, it's probably going to happen again."
- NZPA
