24 January 2020
Aurora Energy’s Customer Advisory Panel has provided its response to the local electricity network’s proposed future investment plans. The Panel’s independent report is their response to Aurora Energy’s consultation document released in November 2019.
The Customer Advisory Panel was established in June last year to advise and represent to Aurora Energy the perspectives and preferences, including the service measures, that are important to consumers. The Panel has met four times to date, with an all-day workshop in November where Aurora Energy explained its proposal.
The Panel’s primary focus has been to provide meaningful input into Aurora Energy’s proposal for a customised price-quality path application, including our future investment plans and pricing options. The Customer Advisory Panel has assisted Aurora Energy in hearing a wide range of consumer and community viewpoints on our proposal.
The Panel was designed to help overcome some of the challenges of consumer engagement on electricity networks’ investment plans. These include the complexity of the topic being discussed, low levels of understanding of the role of electricity networks in bringing energy to consumers and the wide-ranging impacts of Aurora Energy’s decisions on individual power bills and future network services.
The full independent report of the Customer Advisory Panel is available from the consultation website here
Key themes of the report as expressed by the Panel were:
1. We understand Aurora Energy’s proposal and accept its clear focus on minimising price increases while remediating the underinvestment of the past to make it safe.
2. Despite this we have strong concerns about the impact that such large and sudden increases in network prices will have on customers across the region – not just the most vulnerable in our community but businesses and those who manage on tight budgets.
3. Because of this we have suggested accelerating the implementation of a fund to help households in energy hardship become more energy efficient as recommended by the government’s Electricity Price Review. We have also suggested that the fines that Aurora Energy will pay for breaching its regulated quality threshold and the Dunedin City Council Consumer Electricity Fund could contribute to it in the short term.
4. In accepting Aurora Energy’s proposal, we are acknowledging the difficult trade-off that current management have made between safety and reliability. The network should never have been allowed to degrade to the state that it is now in. This points to shortcomings in company governance and the regulation it is subject to. We believe that these regulations should be reviewed in the light of experience at Aurora Energy to ensure that this situation does not recur elsewhere.
5. Aurora Energy’s proposal explicitly defers expenditure to integrate small-scale renewable generation and demand response, to minimise price shocks in the short term. While we accept this trade-off, we believe that giving customers more local options about how they
meet their energy needs will see electricity distributors like Aurora Energy play an important
enabling role as New Zealand decarbonises. We expect this work to have a high priority
in the subsequent CPP period.
6. The industry is highly fragmented and it does not engage with customers simply enough to
maintain their confidence and trust. Aurora Energy will need to develop a
communications plan for all stakeholders in which it integrates messages from other
companies in the electricity industry if it is to achieve the level of community support on
which a successful CPP will depend.
Aurora Energy will use the Customer Advisory Panel’s feedback along with the responses from other customers and stakeholders to refine our draft proposal. A summary of all the feedback we received during consultation, and how we responded to the issues raised, will be included in our final application to the Commerce Commission in June this year and will be publicly available.
Consultation on Aurora Energy's future investment plans is open until 24 January 2020. After that, there will be further opportunity for feedback when the regulator, the Commerce Commission, holds its own consultation during the period July - December 2020.
The Customer Advisory Panel will meet again in April when Aurora Energy will report back to the Panel how consultation feedback shaped its final proposal.
Panel members represent a balance of customers across Aurora Energy’s network:
- Anna Mickell – Queenstown Chamber of Commerce
- Bridget Legnavsky – Ignite Wanaka Chamber of Commerce
- Debbie Gelling – Presbyterian Support Otago
- Debbie George – Age Concern Otago
- Dougal McGowan – Otago Chamber of Commerce
- Jonathan West – Pioneer Energy
- Jordana Whyte – Cosy Homes Trust
- Louise van der Voort – Central Otago District Council
- Dr Marion Poore – independent medical consultant
- Dr Michael Jack – University of Otago
- Michael Robertson – Contact Energy
- Simon Davies – Federated Farmers Otago
- Simon Drew – Dunedin City Council
- Dr Stephen Batstone, succeeding Meaghan Miller – Queenstown Lakes District Council
The Panel was supported in its work by John Hancock, as an independent expert advisor, who
was the lead author of the report.
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. In June 2020, Aurora Energy will apply for a customised price-quality path to take
effect from 1 April 2021. As part of the regulatory process, Aurora Energy is committed to
consulting with consumers before changing our prices and our proposed investment plan
must be approved by the regulator.