Transpower apology cold comfort for Northland businesses - some consider closing or leaving region

The downed pylon near Kaipara. Photo / Michael Craig

Transpower’s apology has been slammed as a “weak” response after the company failed to provide a clear resolution for compensation payments, NorthChamber’s top boss says.

During a press conference on Thursday morning, the state-owned enterprise apologised to the Northland community for the disruption caused after the June 20 pylon collapse in Glorit that killed the region’s power.

Transpower said an independent investigation had revealed a contracting crew from Omexom were responsible, after an inexperienced worker removed all of the bolts from three of the pylon’s four legs.

NorthChamber chief executive Darryn Fisher said he was seriously concerned about several major businesses that have expressed their desire to call it quits, as a result of the response to the outage.

He was disappointed with the agency’s “weak” response that did not explain further how all local businesses could be fairly compensated for their losses.

“Most concerning was when a reporter asked in the conference whether businesses would receive any compensation and they flat out said no. Because legislatively they can not guarantee full supply.”

Transpower Acting chief executive John Clarke said they had been clear that providers of services like water, gas, roading or electricity couldn’t guarantee supply 100% of the time.

“If there were to be a requirement to guarantee supply, it would significantly increase New Zealanders’ power bills. This is why it’s not workable for us to pay compensation, other than where required by legislation, for instance under the Consumer Guarantees Act.

“We have been clear about this,” Clarke reinstated.

The Consumer Guarantees Act entitles individuals to compensation for power blackouts but it does not apply to businesses.

Fisher said the only other thing they added was for “...establishment owners to refer to their insurer to make a claim.”

He explained that for many small and medium businesses, the suggestion was a “time and cost-intensive” process.

“Claiming for insurance means your premium will go up and you have to pay your excess fees.

“Then again, the insurer may refuse the claim... and might use all loopholes to avoid paying up.”

Fisher said businesses were already operating under “tough conditions” and the Transpower scenario had made it more difficult for the owners to pursue anything legally.

National MP for Northland Grant McCallum says Transpower’s response goes some way to addressing their failure. Photo/ NZME

Northland MP Grant McCallum felt Transpower’s response only went halfway to addressing its failure.

“While it’s good to see Transpower accept the findings of the report on their power pylon failure and acknowledge the harm it did to Northlanders, we are left waiting for them to take responsibility for their actions.”

McCallum said he was focused on getting a “significant financial contribution” for the wider Northland community.

He confirmed that negotiations were under way with the agency following meetings after the power cut incident.

“I’m very much staying on the case. Because I feel that Transpower owes the people of Northland,” McCallum said.

Transpower’s Clarke said they had a constructive meeting recently with the Northland MP over what they could do to support communities in Northland given the challenges they had faced.

“We will continue to engage with him and other community representatives and will make an announcement when we are in a position to do so,” he assured.

Fisher said the situation was so dire that some “big employers” who stopped operating for multiple days to assist residential power demands had expressed a desire to close or leave Northland.

NorthChamber chief executive Darryn Fisher says Transpower's apology response did not offer any real resolution on compensation.

“Since they have very little means of regaining their losses which runs in hundreds and thousands of dollars.

“All because of the legislative and legal framework that we have are very prohibitive to pursue this on their own.”

For smaller and medium-sized businesses, the NorthChamber chief executive highly recommended they do their homework and seek legal advice on Dispute Tribunals.

“If your claim is below a certain dollar value. You can get help from them. Otherwise, they may have to go to court if it’s a bigger sum,” Fisher said.

He also added that NorthChamber hasn’t given up on the idea of pursuing a class action with the “way things are going.”

Whangārei Mayor Vince Cocurullo said aside from the ongoing discussion on compensation, Transpower taking responsibility for the incident was “great” especially as it was a government agency.

Whangārei Mayor Vince Cocurullo says Transpower taking accountability was a good sign. Photo/ Michael Cunningham.

“What’s also good is that they are willing to take in the recommendation following the investigation,” he said.

The investigation report stated that the tower fell because the Omexom crew that was performing routine baseplate maintenance work did not follow the standard procedure and removed all of the nuts from three of the tower’s four legs.

The report also found that there was insufficient supervision of two workers, who had not received any formal training for the work. And that one “inexperienced” member removed the bolts while a team leader was engaged in sandblasting work.

Omexom New Zealand Managing Director Mornez Green acknowledged the findings of the investigation commissioned by Transpower and reiterated his apology to all people affected.

“We’ve been doing this type of work successfully for decades. Our standard practice was not adhered to – this cannot happen ever again.

“No work should ever be done that compromises tower stability,” Green said.

Transpower also accepted the investigation’s six recommendations to increase clarity on requirements for repair work, update their training methods, conduct service provider audits, improve its internal review process and review its emergency structures contract.

They acknowledged that Omexom’s incident review was still under way, as was the Electricity Authority review requested by Minister of Energy Simeon Brown.

Avneesh Vincent is the crime and emergency services reporter at the Northern Advocate. He was previously at the Gisborne Herald as the arts and environment reporter and is passionate about covering stories that can make a difference. He joined NZME in July 2023.