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Check out the latest news and updates below.
Check out the latest news and updates below.
CE Richard Fletcher greeted the Commerce Commission’s Decision cautiously, saying there were aspects that were positive. He thanked customers and the Customer Advisory Panel comprising community leaders and representatives who have worked to provide feedback on Aurora Energy’s plan.
In response to a question at this morning’s briefing by the Commission, Dr Fletcher confirmed Aurora Energy intended to continue to engage with this independent advisory panel, which had proved to be valuable and effective at providing a community voice to help shape our future plans.
Dr Fletcher said Aurora Energy was pleased with the movement in the Capital Expenditure and Operational expenditure in the final decision but the company would need to further consider the implications of these final allowances.
“We’ve been heard and the decision confirms that the credibility of the investment set out in our CPP is robust. This is a reflection of the work our teams at Aurora Energy have put in over the last few years and this decision allows us to now deliver on the commitments we have made to our consumers,” he said.
The requirement to recover the cost of our CPP investment over the five year regulatory period and in subsequent years will require further analysis by the company and the Board.
In March, Aurora Energy announced its prices for the current year and consumers should now have been notified by their chosen power retailer of their prices. As a result of the final decision we will not be readjusting our annual lines charges for the coming year which should provide some certainty to consumers.
“The final CPP decision now means we can get on and deliver our plan that has been well thought through, and will allow us to deliver our services to consumers safety and efficiently. Aurora Energy will continue to work closely with all our communities to ensure that we demonstrate the value we are delivering through our investment programme,” he said.
Aurora Energy is raising lines charges from 1 April in line with the Commerce Commission’s draft decision on Aurora’s plans to invest heavily in safety and reliability upgrades across its ageing network.
The 2021 prices announced today (March 1) are based on a draft decision from the Commerce Commission, Aurora’s regulatory body.
Of the $523 million over five years that the Commerce Commission would allow Aurora to spend, an investment programme worth $315.5 million will go towards stepping up a programme of power infrastructure upgrades, begun in 2017 with the replacement of poles, lines and building new substations. Around a quarter of all poles have been reinforced or replaced, and the majority inspected. The work on poles, after years of underinvestment in the network, will steadily continue.
In 2020 Aurora spent $73.8 million on maintenance and improvements, and this year plans to spend a similar amount. New electricity infrastructure on the way includes a new Dunedin Harbour crossing cable and line, and pole and sub-station upgrades in Central Otago and Wanaka. In Arrowtown, Aurora is renewing the ring network, a transmission system that feeds Arrowtown, Coronet Peak and Dalefield.
“Upgrading our power infrastructure is a ‘must do’ situation for a local lines company, and we thank customers for their patience as we go through this major programme of investment and renewal. Power must be safely and efficiently delivered - that’s a bottom line. And our plan will deliver this,” Aurora Energy Chief Executive Richard Fletcher said.
“We also understand affordability is a real issue and value for money is expected. This is essential investment to ensure safe and reliable electricity supply throughout our network, including the growing regions of Central Otago and Queenstown Lakes. We know we can improve our communications and customer service, and a dedicated team at Aurora is working very hard to do this.”
Today’s announcement means that for a standard residential household consuming on average 9,000 units (kilowatt hours) a year, the lines component of monthly power bills will rise by $4.94 for Dunedin customers (up by 7.6% on 2020); by $9.19 for Central Otago and Wanaka customers (up by 8.5%) ; and by $6.20 for Queenstown customers (up by 7.6%), effective 1 April. These percentages are dependent on power retailers choosing to pass on 100% of these increases to their customers.
Higher prices in Central Otago and Wanaka largely reflect the higher cost per customer of supplying power to parts of the network with fewer people, but many infrastructure assets. There are 56,000 customers connected in Dunedin on a network of 2375 kilometres, whereas there are 22,000 customers on the 2,600 kilometres-long Central Otago network. In Queenstown, the number of customers is 14,500 spread over 971 kilometres.
A statutory timeframe means Aurora is required to publish its annual pricing schedule by 3 March. However, final Commerce Commission approval on Aurora’s investment plans is not expected until 31 March, and this could alter today’s announced prices for 2021. Once the final decision is known, Aurora’s board and management will reassess 2021 pricing and communicate any further changes, if required, as quickly as possible.
Fletcher said Aurora had listened to public feedback and had slightly refined the 2021 cost-recovery allocation. The increase in Central Otago and Wanaka regions will be higher than for Dunedin but lower than forecasted. Aurora will again re-assess its cost-recovery allocations for the following year (2022), and public consultation on these changes will occur later this year.
Aurora’s line charges include the cost of distributing electricity to customers across its network, transmitting electricity across Transpower's national grid, and industry levies.
Final impact to the customer will be determined by their chosen power retailer.
19 January 2021
Following customer feedback, Aurora Energy is making changes to its regional pricing approach to ensure the costs of providing electricity supply are allocated fairly.
The plans were outlined in the electricity network’s cross-submission to the Commerce Commission on its customised price-quality path (CPP) draft decision yesterday, available here.
General Manager Customer and Engagement Sian Sutton said: “During consultation, we heard very clearly concerns from customers and stakeholders in Central Otago and Queenstown who felt regional pricing was unfair, and who questioned the basis for allocating different costs to different regions.
“We agree with our customers’ views that prices must be set fairly and based on efficient costs to deliver the services they use. We listened to that feedback and are making changes in two stages as a result.
General Manager Regulatory and Commercial Alec Findlater explains the planned improvements: “Firstly, our next price change on 1 April 2021 will use updated allocators for our operational costs that better reflect the maintenance and administrative costs of supplying each region. The effect will be a modest reduction in the share of operating costs paid by customers in Central Otago and Queenstown, with that reduction recovered from customers in the Dunedin pricing area. While all customers will face an increase in line charges in the first year of the CPP, as signalled in our consultation last year, the increase will be slightly lower than originally forecast for customers outside Dunedin.
“The second stage is our commitment to review our regional pricing model to ensure it remains fair and consistent, and to seek input from our customers and the community. As part of that pricing review, we’ll ask customers and stakeholders for their views on a new approach to allocating asset costs that would move away from the existing replacement cost basis to a regional split of the regulatory asset base.
“The change should provide customers, stakeholders and regulators greater confidence on how costs are allocated, with an approach that better reflects the actual investment in each pricing area. We will consult widely on the rationale for the proposed change and how that would impact prices in each region.
“Any change would only be made after detailed analysis of the regional cost allocations, and once the separated regulatory asset base has been independently audited. Any change to our pricing approach, following consultation, is expected to take effect from 1 April 2022,” said Mr Findlater.
12 November 2020
“The Commerce Commission has today released its draft decision on Aurora Energy’s customised price path application, submitted by the company in June of this year.
“Aurora Energy’s Board and Executive team will now take some time to work through the detail of the draft decision, which runs to some 500 pages, before making further comment.”
Aurora Energy is New Zealand’s seventh largest electricity network by customer connections, supplying electricity to 90,000 homes, farms and businesses in Dunedin, Central Otago and Queenstown Lakes. Aurora Energy Limited is a wholly-owned subsidiary of Dunedin City Holdings Limited, owned by the Dunedin City Council. www.auroraenergy.co.nz
30 July 2020
The Commerce Commission has released its consultation paper on the key issues it has identified during its initial assessment of Aurora Energy’s plan to make its electricity network safer and maintain reliability.
The paper covers a range of issues the Commission wants feedback on including:
Feedback on the Commission's key issues paper will help to shape the Commission's draft decision which it expects to release in November for consultation.
The issues paper, including a consumer summary and submission form, along with more information on the project can be found at www.comcom.govt.nz/aurora. Feedback can also be provided to the Commission by email to firstname.lastname@example.org. Consultation closes on 20 August 2020.
21 July 2020
In early August the Commerce Commission will be holding public drop-in sessions in Dunedin, Alexandra, Cromwell, Wanaka and Queenstown. Hard copies of the Commission's key issues consultation paper (to be released publicly on 30 July) and submission forms will be available for you to take away and Commission staff will be on hand to answer any questions you have.
Thursday 6 August 2020, 3-6:30pm, The Dunedin Centre, Conference Room 2, 1 Harrop Street
Monday 10 August 2020, 3-6:30pm,Alexandra Community Centre, 15 Skird Street
Tuesday 11 August 2020, 3-6:30pm, Cromwell and Districts Presbyterian Church, Lowburn Room, 10 Elspeth Street
Wednesday 12 August 2020, 3-6:30pm, Lake Wanaka Centre, 89 Ardmore Street
Thursday 13 August 2020, 3-6:30pm, St Andrews Presbyterian Hall, 26 Stanley Street
Visit the Commission’s website www.comcom.govt.nz/aurora for more information on its review and consultation process.
12 June 2020
We made our formal application for a customised price-quality path (CPP) to the Commerce Commission today. We have prepared a summary of what’s changed from our draft proposal for consultation to reflect feedback from customers and the community, independent verification and to respond to the expected impacts of Covid-19.
You will have a further opportunity for feedback during the Commerce Commission's own consultation in 2020. For more information about Aurora Energy’s CPP proposal for future investment and the CPP application submitted today, please visit Our CPP Application section of this website. Register here for future updates, or keep an eye on the News and Updates section of this website.
12 June 2020
We made our formal application for a customised price-quality path (CPP) to the Commerce Commission today. Head over to our videos page to watch a video where Aurora Energy chief executive Richard Fletcher answers questions about our CPP Application and how we have taken your feedback into consideration in our revised proposal.
You will have a further opportunity for feedback during the Commerce Commission's own consultation in 2020. For more information about Aurora Energy’s CPP proposal for future investment and the CPP application submitted today, please visit Our CPP Application section on this website. Register here for future updates, or keep an eye on the News and Updates section of this website.
12 June 2020
Aurora Energy today made its formal application for a customised price-quality path (CPP) to the Commerce Commission. The application follows Aurora Energy’s draft proposal for public consultation released in November last year.
The revised proposal has retained only what is absolutely necessary for safety, reliability and to connect new customers. Any additional spending has been removed, reducing the total three-year spend by $20.4 million from $404 million to $383 million and lowering the overall customer price increases from an 18% to a 13% increase on the total estimated power bill.
Our revised CPP proposal will still…
But our plan has been moderated in several areas…
The Commission will review our application and ultimately determine final expenditure and revenue allowances and reliability standards. The Commission’s final decision is expected in March 2021.
Aurora Energy Chief Executive Dr Richard Fletcher said, “Our revised CPP proposal details a three-year programme to continue essential investments, maintenance and upgrades to improve the safety, reliability and resilience of the electricity networks that supply Dunedin, Central Otago and Queenstown Lakes.
“The proposal we submitted today has been revised to reflect customers’ preferences, incorporate feedback from the independent verifier and to respond to the expected impacts of the Covid-19 pandemic.
“We thank the many customers and community organisations for their time and generosity in contributing their views on our future investment plans. Their feedback has shaped our final proposal and given us better insight into what was important to customers and what they expect from their electricity supply.
“Getting the right balance between the cost to customers and the urgent need to improve the condition of network assets is very challenging. Either we increase prices to make the necessary investment or we maintain current prices and the safety and reliability of the network gets worse.
“Customers told us they wanted essential work to be done, but that the pricing was a real concern. We have kept safety and affordability at the forefront when refining the draft proposal to keep the proposed price increase as low as possible without compromising essential safety work. We have removed any additional spending and only retained what is absolutely necessary for safety, reliability and to connect new customers.
“Customers told us they were satisfied with the current reliability of their electricity service. Accordingly, our plan will stabilise unplanned reliability at current levels and we have asked that reliability limits reflect that. Under our proposed plan, we forecast planned reliability remaining at similar levels to the past three years’ average as we continue high levels of renewal and maintenance on the network.
“We understand that price rises required to fund this work will be difficult for some customers and we have made every effort to reduce the overall proposal and look for ways to offset the pricing, including exploring an energy assistance programme. However, the alternative to raising prices is a continued deterioration in the safety and the reliability of the networks that power our communities.
“The final decisions on the scale of the investment and related revenue and reliability standards will be determined by the Commission, following customer feedback and, potentially, further refinements by Aurora Energy, in March 2021. Any customer price increases would take effect from 1 April 2021. Background on Aurora Energy’s CPP and more information on the Commission’s review and consultation process can be found on its website www.comcom.govt.nz/aurora.”
For more information about Aurora Energy’s CPP proposal for future investment and the CPP application submitted today, please visit yoursay.auroraenergy.co.nz.
Customised price-quality path (CPP) The Commerce Commission can set a customised price-quality path to better suit the needs of a regulated electricity business and its consumers. On 12 June 2020, Aurora Energy applied for a three-year customised price-quality path to take effect from 1 April 2021. As part of the regulatory process, the Commission will review our application and consult further with interested parties before making its final decisions on Aurora Energy’s revenue and reliability limits.
Customer consultation. From November 2019 to January 2020 Aurora Energy consulted its customers and the community on its future investment plans outlined in the consultation document, Your Network, Your Say. All the feedback we received is summarised in the Consultation Report accompanying the application. Consultation was wide-ranging and included:
Who is Aurora Energy? Aurora Energy is New Zealand’s seventh largest electricity network by customer connections, supplying electricity to 90,000 homes, farms and businesses in Dunedin, Central Otago and Queenstown Lakes. Aurora Energy Limited is a wholly-owned subsidiary of Dunedin City Holdings Limited, owned by the Dunedin City Council. www.auroraenergy.co.nz
2 June 2020
We asked our customers and the community for their views on our future investment plans. Head over to our videos page to watch video summarising what you told us.
Thanks for participating in our consultation and sharing your views. We have taken your feedback into consideration as we finalised our application for review by the sector regulator, the Commerce Commission.
You will have a further opportunity for feedback when the Commerce Commission holds its own consultation in late 2020.