The Commerce Commission wants your feedback on an important issue that could see your power bill increase dramatically.
Residential Power power bills will increase by approximately $20-$30 per month in Dunedin, Central Otago and Queenstown Lakes over three years depending on where the consumer lives under an application to the Commerce Commission.
If the Commission approves a default five-year investment period, this would result in further increases in years four and five of approximately $5-6 a month.
Will you be affected? Read the full statement from the Commerce Commission below, and have your say on the changes. Consultation closes on 20 August 2020.
Have your say on Aurora Energy’s plan to increase prices to fund major network investment
The Commerce Commission is calling for feedback 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.
Aurora supplies electricity to Dunedin, Central Otago and Queenstown Lakes. It has historically under-invested in its network and in recent years this has resulted in an increasing number of safety incidents and unplanned power cuts.
To fix its network, Aurora has signalled it requires significant investment over the next decade. In June it made an initial application to the Commission for $383 million over the next three years, approximately double its allowances for the previous three-year period.
To pay for this investment, Aurora is proposing price increases to residential power bills of approximately $20-30 a month over the three-year investment period depending on where a consumer lives. If the Commission approves a default five-year investment period, this would result in further increases in years four and five of approximately $5-6 a month.
Aurora has also signalled it will make a second investment application for a period of five years to address longer term issues on its network.
The Commission’s role in Aurora’s investment proposal is to set network reliability standards, as well as determining how much money it should be allowed to recover from its customers to carry out its plan and over what period.
The issue of Aurora’s approach to regional pricing is for Aurora and the Electricity Authority, while calls for funding to come from elsewhere are for Aurora and its owners, Dunedin City Holdings and Dunedin City Council.
Associate Commissioner John Crawford says the Commission has identified a number of key issues it wants consumer and stakeholder feedback on including options for minimising consumer price shocks.
“We are considering if spending could be deferred, reduced or recovered over a longer period to soften price shocks. However, in making these decisions we also have to consider Aurora’s financial stability and its ability to complete necessary work to fix its network,” Mr Crawford says.
“We want to hear consumer preferences for price increases. For example, would they prefer prices to increase in gradual and steady increments or price increases to be smaller in the first year, followed by larger increases in the following years to give more time to prepare. We also want to know if consumers are willing to pay more in total due to interest costs in order to smooth the price increases over a longer period.”
Other topics the Commission wants feedback on include:
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 by email to email@example.com. Consultation closes on 20 August 2020.
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