By Daisy Hudson for the Otago Daily Times

Power prices could rise by nearly $500 for many Otago households, according to Aurora Energy's just-released draft pricing structure.

Photo: 123RF

The proposal outlines a three-year, $400 million programme to tackle ageing electricity infrastructure in Dunedin, Central Otago and Queenstown.

Aurora Energy chief executive Dr Richard Fletcher said the proposed plan was about the "prudent investment that is essential to meet the needs of our communities now and into our future, to address the errors of the past and position the network for its future use".

The proposal outlines estimated increases in residential line charges of up to $21 a month in the year ending March 2022, or $252 for the year, followed by up to $10 a month in 2023 and 2024 to fund a significant increase in network and related system upgrades and maintenance.

Dr Fletcher said the company acknowledged the price rise would be difficult for some customers. But the alternative was a continued deterioration in the safety and the reliability of the networks, he said.

"The duty of the current Aurora Energy team is to tackle the challenges created by historic under-investment head-on and develop the networks to improve safety and reliability, cater for growth and prepare for the future.

"In Aurora Energy's case, low levels of investment in the intervening decades has helped keep line charges lower than the national average but has led to a gradual deterioration of the electricity networks which power our communities and economy."

There was some scope to modify the proposal before it was submitted to the Commerce Commission in June 2020, but Dr Fletcher said it was important to be clear "that there are some key safety and renewal investments that simply have to be done".

Aurora Energy's lines charges form about one-quarter of an average residential power bill.

Across the entire network, the monthly total electricity bill was expected to increase on average by 18 percent for residential households.

"The $400 million three-year plan we are proposing reflects the prudent level of investment required to de-risk the network and position Dunedin, Central Otago and Queenstown Lakes for a future where the communities are heavily reliant on electricity," Dr Fletcher said.

As previously signalled, Aurora Energy's proposal will form part of its application to the industry regulator, the Commerce Commission, for a customised price-quality path (CPP), expected to take effect from 1 April 2021.

The final decisions on the scale of the plan and related pricing and reliability standards will be determined by the Commission, following customer feedback and further refinements by Aurora Energy.

The Commission's final decisions are expected in March 2021.

Aurora Energy customer and engagement general manager Sian Sutton said the team was committed to ensuring people had the opportunity to comment on the proposal before the final report going to the commission.

"For our consultation, we have simplified these complex issues so that all members of the communities we service can relate this investment back to their lives.

"Our online consultation website has all the relevant information people need to understand our proposal to develop an informed opinion and easily make a submission."

Hard copies will be made available at the Aurora Energy offices, and at local councils throughout the region.

Drop-in sessions are being held for those people preferring to speak face-to-face.

Aurora Energy encouraged customers to call 0800 22 00 05 for more information or visit the consultation website.

- This story first appeared on the Otago Daily Times.