Some Cause For Optimism In Aurora's Network Progress - But Unplanned Outages Remain A Concern

The Commerce Commission has today reported that Aurora Energy Limited (Aurora) has complied with all of its price and quality regulatory obligations in year two of its five-year customised pricequality path (CPP). However, the Commission has some concerns over an increase in unplanned outages impacting consumers.

The Commission has published its second fact sheet on Aurora, providing a snapshot of performance and delivery in the second year of its CPP. Aurora applied for the CPP to address historical underinvestment in its network. In assessing network reliability for the year ended 31 March 2023, Commerce Commission General Manager of Infrastructure Regulation, Andy Burgess, says that despite a strong investment in its network, the average time without electricity experienced by Aurora’s customers due to unplanned outages has increased.

Aurora’s spend for this period was $145.4 million, including $54.6 million towards asset replacement and renewal. Mr Burgess says replacing old and failing assets is a priority under Aurora’s CPP to address safety and reliability issues for its customers.

“While we note the positive action to improve asset health and safety - we are also conscious of the impact outages can have on households, businesses and the wider community who rely on a safe and reliable supply to go about their everyday lives,” says Mr Burgess.

As part of its CPP obligations, Aurora will publish independent expert reports in March this year as part of a mid-CPP review. These will examine Aurora’s progress under the CPP further and make recommendations for improvements.

“We are working with Aurora to unpack the underlying issues contributing to outages and will offer further comment after we read the independent reports,” says Mr Burgess.

While outages remain an issue, the Commission notes that Aurora has made improvements in the area of customer communication. A new outage management system means customers can now sign up to receive texts alerts on outages and estimated time to restore power.

The Commission will continue to monitor and report on Aurora’s performance under the CPP during its five-year term from 1 April 2021 to 31 March 2026. The factsheet can be viewed on the Commission’s website.

Background

Aurora is New Zealand’s seventh largest electricity distribution network by customer connections and is two years into its five-year CPP. Aurora’s CPP, which came into effect in April 2021, allows the company to recover up to $563 million from its consumers to address safety and reliability issues across its network. Aurora must also disclose additional information to improve the visibility of its performance and accountability to its stakeholders, including customers.

As part of the Commerce Commission's information disclosure requirements, Aurora, like all regulated electricity lines businesses, is required to report annually on a range of metrics covering asset health, profitability and quality of service. Specifically, local lines companies have to report on both the number of unplanned outages and the average duration of each unplanned outage. This includes providing a breakdown of causes for all unplanned outages. Causes can be related to weather, defective equipment, third party interference (for example an accident that causes damage to infrastructure), vegetation damage or other causes.

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