Removing the risk to the power supply to the top half of the North Island will take three or four years and cost $540 million, Transpower says.
Parts of Auckland, West Auckland, the North Shore and everything north of the Auckland Harbour Bridge were without power for several hours today when a container on a fork lift hit a high-voltage power line in Otahuhu.
Power was restored by 1pm, Transpower said.
The outage was caused after a forklift carrying a container knocked out the main source of power for the North Shore, parts of West Auckland and Northland.
Transpower chief executive Patrick Strange said the driver of the forklift was a "lucky" man.
"There would have been a very big explosion and I understand the tyres were all blown out," he told NZPA.
He said the North Auckland and Northland Project (NAaN) to reinforce the power supply through Auckland was still years away from completion.
"We are running a $540 million cable which will basically parallel this line. That will be completed in 2013 and put a transmission ring around Auckland."
The new 37km of cable would run from Pakuranga, in the eastern suburbs, under the road, through the Vector Tunnel, across the harbour bridge and in ducts on the northern motorway to Albany.
"This will remove the exposure to this single double-circuit line. It means that you could lose the cable or both circuits and we would have time to restore supply without affecting customers."
North Shore mayor Andrew Williams said the cut has given Transpower "a shock", causing people to be trapped in lifts and black-outs at traffic lights.
About 280,000 homes and businesses from West Auckland, the North Shore and Northland lost power this morning.
Mr Williams said 20,000 businesses were without power this morning and it caused "chaos" to traffic.
"There's a huge cost to people right now, twiddling their thumbs who can't do any work for an hour or so," Mr Williams said.
He said the cut highlighted the fragility of the New Zealand network.
"You can't be reliant on old over-head lines floating around West Auckland," Mr Williams said.
Auckland Mayor John Banks said the cut was "third world."
"I have come to the end of my tether with this outfit, Transpower. They've caused hardship for a lot of people. It simply isn't good enough," he said.
Transpower spokesman Geoff Wishart said the main Otahuhu-Henderson line was tripped while maintenance was being carried out on the back-up line.
Inspector Lance Burdett said police have received hundreds of calls this morning.
He said the outage has cut power to traffic lights but given it happened in peak traffic, it has not caused major disruptions.
Mr Burdett said drivers should take their time and be careful.
Trains on Auckland's western line were also delayed by signal and points failures.
Veolia Transport runs the passenger trains in Auckland. The company's spokeswoman Silva Bassett said all the standby points and signals came on after the power cut, except those between Waitakere and Swanson. She said Ontrack is fixing the lines this morning.
Ms Bassett said the failure caused one train to be delayed by 40 minutes while others faced delays of 20 minutes as the knock-on effect of late trains affected other services.
"We're lucky in a way that it didn't happen until 8.10am," Ms Bassett said.
Auckland's power struggle
It has been 10 years since Auckland CBD experienced its five week long power crisis in 1998.
The electricity to downtown Auckland was supplied by Mercury Energy via four power cables, two of them were over 40 years old and oil filled.
Specialists were flown from overseas to install an emergency power cable and most of Queen Street was deserted for around five weeks.
The second major Auckland blackout to shake resident's confidence occurred on 12 June 2006.
The power went off at around 8:30am and was not restored until the late afternoon, affecting over half of Auckland.
The cause of the blackout was due to a cable falling on a transmission line at the Otahuhu sub station.
It was later revealed that the electricity transmission system was not adequate and that the substation had design deficiencies.
Transpower: Removing supply risk will take years
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