The Commerce Commission has received Aurora Energy’s (Aurora) application to increase its prices to fund a $383 million three-year plan to address safety and reliability issues on its electricity lines network.

Aurora, which supplies electricity to 90,000 homes, farms and businesses in Dunedin, Central Otago and Queenstown Lakes, says its investment plan is to address historic under-investment in its network resulting in a gradual deterioration of its equipment. In recent years this has caused a higher number of safety incidents and an increasing number of unplanned power cuts.

To pay for this investment, Aurora is proposing significant price increases from April 2021. Aurora’s proposal estimates the 3-year increase in the total average residential power bill is between 10.6 and 16.7%, or an additional $20-30 a month*, depending on what region the customer is in.

“Undoubtedly, significant investment is needed in Aurora’s network. Our role over the coming months is to decide the maximum revenue it should be allowed to recover from its consumers to carry out its plan and over what period,” Associate Commissioner John Crawford said.

“We are acutely aware of the impact COVID-19 has had on consumers in Dunedin, Central Otago and Queenstown Lakes. As part of our assessment we will consider what options there are to manage price shocks, while ensuring Aurora’s investment plans are for the long-term benefit of their consumers.”

The Commission has also received a report by independent experts, farrierswier, whose role it was to review Aurora’s plan ahead of it being submitted. The report is designed to help the Commission focus its review on the key issues which warrant closer scrutiny.

The Commission will formally consult over the coming months, including holding meetings in Dunedin, Central Otago and Queenstown Lakes after it publishes its issues paper in late July. A draft decision will be released before Christmas, with a final decision to be made in March 2021. Consumer price increases will take effect from 1 April 2021.

In the meantime, the Commission welcomes feedback on Aurora’s final proposal from consumers and other stakeholders. This can be emailed to feedbackauroraplan@comcom.govt.nz

A copy of Aurora’s investment application, the expert’s report and background information on the project is available at www.comcom.govt.nz/aurora

*Proposed pricing information sourced from Aurora’s customised price-quality path application, Appendix K paragraphs 815, 817 and 820.

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