Tue, 1 Nov 2016 7:50 a.m.
Morning Report with Guy Espiner Link
Hefty pricetag to replace Dunedin’s rotting power poles
Audio | Download: Ogg MP3 (duration 3′40″)
Dunedin and Central Otago power company Aurora Energy is to replace 3-thousand rotting power poles at a cost of 30-million dollars.
Received from Christchurch Driver [CD]
Tue, 1 Nov 2016 at 11:35 p.m.
Readers, your correspondent has nothing new to offer tonight —but just many examples of what we already knew : Delta/Aurora chief excutive Grady Cameron treats the facts with almost radioactive distaste, and is completely willing to say and do anything to save his own skin. Now, we have a “polemic” of evidence.
Rob Hamlin is correct – there is a massive coverup underway. Let us consider Mr Cameron’s cancerous comments on RNZ with Guyon Espiner today :
The new Aurora plan with an extra $26M was ‘nothing to do with Richard Healey’ ….The board already had a plan in place because “back in September I went to the board and advised them that I wasn’t happy with the progress of our current plan in terms of how fast we were getting through the replacement programme” …. and “the plan that was announced yesterday was the revised plan”.
Now there are several obvious problems here, and the first is Mr Cameron’s mealy-mouthed dissembling that “back in September” he went to the board. September was only 5 weeks ago, and, just 4-5 weeks or so before that, in April 2016, at a cost of hundreds of thousands of dollars, Mr Cameron released Aurora’s long term Asset Management Plan (AMP), all 185 pages of it for the period 2016-2026. The specific purpose of this doorstop is to schedule “asset replacement”, and the plan of course specifically provides for pole replacement. Mr Cameron is asking us to believe that the very next week after the 10-year AMP was complete, he woke up and thought ‘Good grief ! We have completely messed up the asset management plan we have just had the board sign off, and which we have just spent months on ! We must re-do it immediately and add $20-30M to pole replacement ! That is Job #1 Today…. (after mid morning madeira cake and my daily PR strategy meeting). Readers, there are many at Delta who will confirm that Mr Cameron’s GM of Capability & Risk Matt Ballard, was instructing staff the exact opposite…. “that under no circumstances is the current $2.96M budget for pole replacement to be exceeded, for ANY reason, and GET USED TO IT”.
In the fantastic event that there is any shred of truth to this rubbish from Mr Cameron, he needs to be sacked for incompetence, because he has just shown he is incapable of producing an asset management plan that is credible or even somewhat reliable. It is so bad that Mr Cameron could be accused of numeric dyslexia. How can a board comprised of accountants, to whom forecasts and numbers are religion, put up with this ? Is it because Mr Cameron has promised them Mutually Assured Destruction if he was removed? There is plenty of evidence and emails to show that far from wanting to resolve this, Mr Cameron and his enablers wanted to play the man and sweep this under the rug, an approach that continues to the present day.
Your correspondent has received information that provides the translation code for Grady Cameron’s weasel worded dissembling “back in September I went to the board … not happy with the progress”. It is this : Mr Cameron advised the board ‘We employed incompetent staff who claimed they could “reinforce” poles for around $1200 each, to give a maximum 10-year extra life, but this $1,200 was a figure pulled from their own fevered imaginations and staff and contractors have told us to take a hike, it will cost around $3,000, which compares VERY unfavourably with the cost of a straightforward new pole with a 50-year life at around $5,000. Being the desperate incompetents we are, we had latched onto this half-baked and untested theory like a barnacle on a boat hull and assumed we could reinforce more than twice as many poles as we needed to replace over 10 years. (7290 reinforcements vs actually replacing just 3381 poles).’ (Readers, see Page 78 of the Aurora AMP). ‘If we do a half-baked reinforcement approach we have another budget problem of $13M, but if we put in all new poles we will have a blowout of around $28M (over and above the apples vs oranges $26M issue I deceived the board about earlier).’
Grady Cameron confidently stated to the nation that the plan unveiled yesterday “was the revised plan” (the board had approved)…. For about three seconds, and then when queried by Guyon Espiner incredulously “so nothing at all to do with Richard Healey ?”, Mr Cameron went into high range reverse and forward mode – at the same time. He responded “NO…. the plan that we’ve we put forward is a more aggressive plan now….” due to “a significant amount of public scrutiny”. Memo to Mr Cameron : The public scrutiny only started because Richard Healey broke ranks and blew the whistle, to the cost of his career.
Your correspondent thinks that Grady Cameron is also fevered and mainlining on dividends. If Mr Cameron was telling the truth, that he had concerns, and a plan that very coincidentally was the same as Richard Healey’s then why did he cancel the meeting with Richard Healey who wanted to discuss his concerns about the state of the network ? He should have been saluting a fellow soldier, not burying him…. Instead of refusing to meet with him, why did Mr Cameron discuss taking legal action against Richard Healey when Mr Healey was still an employee of Delta ? (Yes we know about this Mr Cameron, you have very few allies left within Delta —perhaps you should be looking next to you and channelling Shakespeare ….et tu, Matt Ballard?). Instead of cancelling the meeting, why did he not send an email to say, ‘Dear Richard, I have some fantastic news, all or most of your concerns are solved, we are going to be announcing a huge increase in pole spending of tens of millions of dollars immediately (just as soon as I can arrange the requisite saturation PR coverage that portrays me in the best possible light and take the focus off the Noble debacle). I would be delighted to meet with you for 3.5 minutes at 10.36am after mid-morning espresso and madeira cake to outline this to you. Your humble CEO, Grady.’
It is often the little things that give the game away…. And try as they might, the PR minders can never control the interview process. Grady Cameron spent several minutes explaining to the country how this was just a misunderstanding and he had – before Richard Healey (!), realised what was wrong, and he and the board had a plan to fix the very things that Mr Healey was complaining about. Guyon Espiner asked near the end, “Do you thank Richard Healey for putting pressure on you for this ?” ie for helping Grady Cameron receive great exposure in the media to explain his hitherto secret new plan to the nation, very similar to Mr Healey’s, that all was well, the network was aged but safe, lots of poles were being replaced. Instead of “Come back Richard, my fellow safety conscious soldier in arms, all is forgiven,” we and the country heard his CEO mask slip and got the real, petulant Grady Cameron who snarled “No I don’t thank Richard Healey” —proving that this was all just a charade, and Mr Cameron and the board were ropeable that they had been exposed as ineffectual and incompetent guardians of the region’s electricity network.
Continuing down the charade theme, consider this final thought for the evening, readers – Cameron, Crombie, and the board of accountants announced this plan WITHOUT ONE CLUE AS TO HOW IT IS TO BE FUNDED. This is sheer arrogance and disdain for power consumers and ratepayers – what other public expenditure of this level has ever been announced with no discussion about who or how it will be funded. The board of Delta and Aurora have proven yet again, how incompetent and derelict in their public duty they have become.
Posted by Elizabeth Kerr
This post is offered in the public interest.
*Images: radionz.co.nz – Guyon Espiner | odt.co.nz – Grady Cameron
27 responses to “Delta #EpicPowerFail 5 : Grady Cameron on RNZ : How many Asset Management Plans does it take to get a Real One ?”
### channel39.co.nz Tue, 1 Nov 2016
Mayor seeking answers from Delta and Aurora
The Dunedin City Council and its holding company have welcomed an accelerated plan for power pole replacement in the region. This follows ‘whistle blowing’ by a former employee who is concerned about the safety of many power poles around Dunedin.
Channel 39 Published on Oct 31, 2016
One thing that caught my attention reading Grady Cameron’s remarks in the ODT was his assertion that the timelines set out of 3 months to fix condition Zero poles and up to a year for condition One poles do not apply to Aurora because they have an audited safety management system in place. That is true according to Regulation 47 of the Energy Safety Regulations 2010. But as we now know Energy Safety (a division of WorkSafe) is reviewing the Aurora safety process and you would think the credibility of the system (now under question) would default Aurora back to the normal time frame until WorkSafe can restore confidence in the processes. Surely Mayor Cull representing we the rate paying owners of the Lines company has asked this question? Otherwise the Delta CEO is conveniently hiding behind Regulation 47 to give Aurora more flexible time to fix the problem.
The other thing that worries me is that this same AMP lists a lot more assets that are ageing and in need of an early upgrade eg Andersons Bay Substation and the various 33kV Lines. Apparently the Aurora Board have adopted a “fix on failure” approach which worries me as we are talking about utilities that were installed in the early 1960s.
It is high time Mayor Cull sat down and actually read the Aurora AMP and hopefully comes to the same conclusions as the rest of us – an ageing network (like the South Dunedin stormwater drains) that needs very urgent attention.
It is now obvious that the 3 inquiries into this shambles have been made pointless. First, Energy Safety are limited by the Acts that they administer. But Delta have already stated that they don’t need to comply. DCHL are supposed to be doing an inquiry. What a joke that is. Turkeys and Christmas stuff. Commerce Commission? No power to find out the real background to all of this.
And of course the funding. Where does the unbudgeted $26m come from? The only way that this announcement of this big spendup on “solving a public perception” was able to be released was with the active cooperation of Delta, Aurora, DCHL and the DCC.
Only by continuing to fully publicly investigate and expose the arrant nonsense that we have seen so far will any change occur. That will happen when some of the players realise to save their own skins then others will have to be sacrificed. Hopefully the ODT and Story will continue their jobs.
Re ODT, Dave Cannan in “The Wash” is doing a great job of communicating and consciousness-raising. Including readers photos and reports makes it personal, an issue everyone can relate to.
Many people don’t read articles with complicated back-stories. Large sums pass-the-parcel’d from one entity to another, oddly enough some of them with the same board members and other “top dogs” – long complicated stories, too much for many people in the endless busy stress of their lives.
We need detailed reports by smart journalists with sensitive bullshit detectors, we need critical analyses, and we need cartoonists and columns like Dave Cannon’s to communicate with as many people as possible, on and on till the people currently overpaid for underperforming get their shit together.
Oh dear! Then we are out of business here if that is the case. The Wash is pretty much Facebook.
Well, Whatiffers…. Send your prayers and good wishes to Richard Healey, he tells us that he is spending most of today with Energy Safety.
No, The Wash communicates with people who may or may not read WhatIf and Council reports and other long serious documents. They vote and they talk to one another – just like us superior people do. They won’t be engaged in topics if they are excluded by shortage of time, lack of background, or being sneered at.
Just like Facebook. ODT Facebook helps feed The Wash.
This seems to be the guts of Grady’s plan. Replace all 0 & 1 poles ASAP and then 1000 poles PA thereafter. As CD notes, it is hard to see where the c.$30 million required to do even this is coming from. Also as russandbev points out it looks like some serious money will be made (extracted from us….again) by somebody given the ‘official’ per-pole replacement price has suddenly doubled from $5,000 to $10,000.
Assuming around a reasonable $1,000 or so profit per pole for contractors under the old pricing regime this means about $6,000 ($1,000+$5,000) ‘gravy’ per pole for whoever gets the new ‘Grady’s Saved Us’ contract. That amounts to some $18 million profit for the first two years’ panic replacements, and $6 million pa indefinitely thereafter – Nice work if you can get it!! And as to who’s getting it??? Well, one might assume that someone well connected will have the inside running for this nice little extra bonus.
However, this plan, which appears to be ‘IT’ will not significantly rectify the situation. Even if it is fully funded and adequately delivered, which personally I doubt, then this only means that all currently admitted to 1 & 0 poles will be replaced, and the rate at which existing poles fall into this category will be slowed, but not necessarily eliminated thereafter. If there are more 0 and 1’s out there, or the better (relatively) poles fall into 1 & 0 state at more than 1,000 a year, as one suspects that they will, given that little has been done for decades, then the network will continue to deteriorate into critical status.
Also note that nothing has been said/additionally budgeted for the other components of the network, which are also in critical condition. The wires, the transformers and above all the underground HT lines in Dunedin. It is these last that offer the most potential for catastrophic failure. One assumes that both the hospital and the Uni. are reliant on these. The hospital has its own back up. However, if the system blows and the Uni. is without power for weeks, It is hard to see how it can operate and deliver the education/research that it has been paid for to the strict timebase of the academic year. The entire student body might then quite reasonably ask for their money back (at least) – What then?
Rob Hamlin, “Assuming around a reasonable $1,000 or so profit per pole for contractors under the old pricing regime this means about $6,000 ($1,000+$5,000) ‘gravy’ per pole for whoever gets the new ‘Grady’s Saved Us’ contract. That amounts to some $18 million profit for the first two years’ panic replacements, and $6 million pa indefinitely thereafter – Nice work if you can get it!! And as to who’s getting it???”
Isn’t this a bit like how to get free money/goods and avoid tax, using a company or trust? Buy something in name of entity that can claim it back off tax, sell it at a profit or loss to another section (in the same human’s actual if not on-paper legal ownership), transfer to another, buy second hand jet ski for $10 although it’s never been wetter than a wipe with a moist cloth – you know the scenario.
So – why are $5000 pole replacements now $10,000?
Does one of the shape-shifters need to produce a profit? Will the accountant query “Pole replacement, $10,000 each”?
What does an auditor know about the genuine cost of replacing poles, as long as it’s consistent it’s OK, isn’t it?
Does another need a share of the McProfit for whole-of-life support of an underperforming asset a.k.a. liability?
A safety message.
Here is what to do if a power pole falls on your car while you are still inside.
The text accompanying the video by Puget Sound Energy (10.4.15) has been updated here for NZ Emergency call conditions:
This Might Shock You: Downed Power Line
● If you come across a downed power line, stay as far away from it as you can and call [111 New Zealand]. Assume it is live.
● Never touch a downed power line or anything near it.
● Do not drive over down power lines.
● Should a power line fall on your car when you’re driving, slowly continue to move completely clear of it.
● If your car can’t move away from the power line, stay in the car until help arrives.
● If a person or pet comes in contact with a power line, stay clear and call [111 New Zealand] immediately. Do not touch them or the wire.
So where is Dunedin’s public awareness campaign on what to do when (not if) one of our 3000 rotten poles falls over?
Surely Aurora, Delta and the DCC knowing how dangerous the problem is, but failing to inform the public what to do when poles fall over, is not just negligent – it’s criminally negligent.
Not to mention it’s highly likely that a charge of criminal negligence could ALREADY be brought against the head of Delta by police under the Crimes Act 1961.
“a person is criminally responsible for omitting to discharge or perform a legal duty” IF “the omission or unlawful act is a major departure from the standard of care expected of a reasonable person”
Criminal Negligence under the Crimes Act
If someone is killed, there could well be a case for manslaughter against the CEO if he hasn’t taken the precautions a “reasonable person” would take.
I may have misheard Mr Cameron on the radio but I understood him to be saying the $30 million replacement programme was happening not because of any obligation or safety concerns, but because of adverse publicity.
Aurora can charge customers based on its costs and reasonable returns, but I would not have thought they could charge customers extra to fund a $30 million avoidance of adverse publicity campaign.
In any event if we are in the business of $30 million capital works programmes as a result of adverse publicity could Delta put another $30 mill into the drainage system in and through South Dunedin if we complain on national TV?
No mis-hearing there at all. In addition Cull said that he was “happy to fund this to meet a perception”. It is all very clear that the spin is to repeat time and time again that the network is safe but ageing, that there was a plan all along (despite this not appearing in the asset management plan of Aurora just a few weeks earlier, that Richard Healey is not a nice person for going to the media, and the media are really to blame for all of this as they caused the public “perception” that things were not tickety boo on the streets.
But I come back to the “inquiries”. Anybody disagree that any findings will be dismissed on the basis that Delta/Aurora/DCHL/DCC have already acted so the findings can be, and will be, ignored? That is what has happened in the past with Jacks Point and Luggate. They invariably tell us that they “have learnings going forward” – until the next time.
All those photos – in the “proper” media as well as in The Wash – of leaning poles and poles clearly rotting out at the base, are merely perceptions. Illusions, delusions. Photoshopped. By Mr Healey, in his vicious campaign to stir up disquiet where there’s no problem at all, yes?
Mr Steel’s death was faked – right? Perceived as real due to media manipulation of public opinion – of course.
Come on Dave, tell us he’s vacationing with Elvis, you saw them on one of your China jaunts. When you’re telling yarns you might as well go all the way. They shouted you a beer didn’t they? Add more “corroborative detail, intended to give artistic verisimilitude to an otherwise bald and unconvincing narrative.” (W S Gilbert)
Cull and Cameron, you are sick puppies. Sick, sick, sick.
You’re haemorrhaging credibility.
Take yourselves well away from decent people and don’t bother leaving a forwarding address.
Please add Graham Crombie and the Board of Directors to the exit list.
Or was it the court engagements list.
Huge thanks to Vaughn Elder and ODT, and Story (TV3 Newshub), for keeping the pressure on Cameron, Crombie and Cull and the board(s) of Delta and Aurora. KEEP IT UP.
Due to your excellent investigative work on the Aurora/Delta issue we may tend to cite your news articles at greater length (with weblinks) than we normally might do. This will of course direct our readers your way as has been the case historically via online referrals in complimentary support of your publications.
We note to E tu’s Mr Gallagher that Grady Cameron’s announcement of c.$30M for pole replacements, is a sum that has not been “found”…. best he read and understand the financial reports for Aurora and Delta as well as Aurora’s AMP. He might be shocked (refer posts on the financials by CD at this website). While trying to replace dangerous poles, deferring spend on new network facilties in Central Otago, including Queenstown Lakes, is No Way to meet the Minister of Tourism’s [John Key] demand for visitor accommodation and attractions, or to meet housing demand for those employed in tourism and related ventures. At this rate Central Government will have to mandate centralised control of the electricity networks [precedent: railways, anyone?] for guaranteed supply ?!
Wed, 2 Nov 2016
ODT: Aurora’s chief told to ‘man up’
A union leader has called on Aurora chief executive Grady Cameron to “man up” and take responsibility for the number of compromised poles in Dunedin and Central Otago. E tu (formerly Engineering, Printing and Manufacturing Union) industry co-ordinator Joe Gallagher yesterday praised Aurora’s $30.25 million programme to replace close to 3000 power poles in little over a year. […] However, he felt Mr Cameron’s claim there was no health and safety problem and it was only fast-tracking pole replacements because of a loss of public confidence was “just plain odd”. […] Mr Gallagher’s comments come as the Otago Daily Times has been told Mr Cameron briefed staff yesterday Aurora planned to continue to replace 1000 poles per year after the fast-tracked plan was completed to keep ahead of the issue. Cont/
b o y ● o f ● t h e ● m o m e n t
If someone else tragically loses their life due to the degradation and dangerous state of the Aurora/Delta electricity network is there a case for manslaughter charges to be brought ?
We would like to think so.
“But I come back to the “inquiries”. Anybody disagree that any findings will be dismissed on the basis that Delta/Aurora/DCHL/DCC have already acted so the findings can be, and will be, ignored? That is what has happened in the past with Jacks Point and Luggate. They invariably tell us that they “have learnings going forward” – until the next time.”
The above defines the real problem. There will be no accountability, we will not relitigate past issues, we will find only dead men guilty!
Thus we get incompetents employed at over $200,000 per annum (in some cases over $500,000 pa) who do not have the skills to do the job, to see in advance the problems, to ensure funds are available to do regular maintenance to ensure competence, because competence is now not valued. Far better to employ a monkey whom is capable of deny, deny, deny, than an engineer to sort out daily issues that will always arrive.
And the people buy this! That is why we got incompetent former councillors rather than Neil Johnstone, incompetent councillors who do not understand theft and contract fraud like Wayne Idour, and idiots who could not plan an outside dunny, rather than a Paul Pope.
The electorate has bought the PR bullshit because they are trained by TV to accept sound bites rather than reasoned argument.
Rationality is a lost art.
Wed, 2 Nov 2016
ODT: History shows power to the people lost
Delta’s woes will be shared with Central Otago
By Nick Loughnan
OPINION What Central Otago once owned with its electricity assets, and was forced to give up, is still fresh in the minds of many of its residents as the operations of Dunedin City Council-owned Delta come under the spotlight yet again after a very courageous and selfless call on public safety by one of its senior employees. A little history will explain how. New Zealand pre-1998 had a very different electricity network ownership model. All regions had their own municipal power authorities, with locally elected directors who gave willingly of their time to benefit their consumers’ interests through provision and maintenance of electrical generation and distribution assets. Central Otago’s original power board had a long history of innovative and pioneering supply of electricity. […] It is fair to say there was widespread and justifiable resentment in Central Otago over the Bradford electricity reforms of 1998. The proudly profitable and community focused power board was gutted, retaining only its generation assets, while the Dunedin City Council bought the Central Otago lines assets as part of Aurora/Delta. […] Since the reforms of 1998, the energy component of the average Central Otago household’s monthly power bill has increased by about 50%, while lines network charges have increased by more than 1000%. […] The existing network has been poorly maintained to the point of neglect, and its reliability has deteriorated sharply, with the Commerce Commission putting Aurora on notice for its poor asset management. Cont/
● Nick Loughnan is a Central Otago farmer with a long-term interest in the electricity industry.
You all realize of course, that the $30M is funny money if Delta gets contracted to replace the poles?
The $5000/pole figure (or $10K/pole depending on what you believe) is based on a cost recovery model that accounts for labour and materials. But of course, labour is already accounted for as a cost in Delta’s standard business plan – these are permanent staff, not contractors.
So a large portion of the $30M is yet another money-go-round. From Aurora to Delta and hence back to Aurora again.
Otago Daily Times Published on Oct 31, 2016
State of Dunedin’s power poles
Whistleblower Richard Healey questions Aurora chief executive Grady Cameron’s claim its network is safe.
Next time you’re turned down for a wof on your vehicle because there’s slight fluffy edge – “fraying” – on a seat belt – think of the standard for power poles.
If you’re a cyclist and annoyed at the requirement to wear a cycle helmet – ask yourself why everyone who goes within coo-ee of power poles isn’t also required to wear ’em. You aren’t allowed to risk your own life but it’s OK for large companies to risk other people’s.
Health and Safety?
Yeah-nah, it’s the NZ way. Don’t risk your own body by using a ladder as generations of us have done, no, you have to use scaffolding. But risk hundreds of other people’s lives, and their wellbeing and comfort and food safety if there’s a major outage, it’s only “perception”, a beat-up by media. Bonuses all round for board and top management for the annoyance caused by public exposure!
This is quite some storm. Strong winds, heavy rain and hail, lightning and rumbling thunder. High winds took out a pole on Forbury Rd in September. Richard Healey quite rightly fears what might happen next in such conditions, but I imagine Grady Cameron and the directors of Aurora will have a different perspective on that, particularly after squandering millions on failed ventures, non-essential services and exorbitant salaries while deferring investment in infrastructure.
Just observing poles from Kaikorai Valley through South Dunedin and there are plenty of examples where a strip has eroded away at the base of the pole where it meets the pavement. It is about 1″ inset all round the pole. This applies to the older style wooden poles. Isn’t the base where the pole meets the pavement the breaking point if it flexed in high winds with top-heavy loading? Just wondering because I read recently Aurora moved from measuring the health of a pole from the base to a point higher up, which therefore would minimise reporting of that fault in the pole. I wonder if that was the intent.
It must be a toxic corporate workplace if staff say they are at risk of being shot for raising concerns with their employer.
Douglas Field Published on Nov 2, 2016
A glimpse into the disarray of a small New Zealand local body’s politics and mismanagement. How they defer essential infrastructure maintenance to waste on ‘vanity’ projects and then when challenged they obfuscate. Pathetic.
Thu, 3 Nov 2016
ODT: Power pole safety concerns spread
Aurora Energy is not the only Otago power network with a dangerous attitude towards safety and maintenance, a lines company chairman says. Marlborough Lines chairman David Dew said OtagoNet, which operates the lines network in the Clutha district, parts of Central Otago and coastal Otago from Waitati to Palmerston, had “very similar” issues to the ones Aurora was facing. Marlborough Lines owned 51% of OtagoNet until September 2014, when a “shoot-out” caused by a disagreement over maintenance levels resulted in The Power Company and Electricity Invercargill buying its share for $153 million. Mr Dew was also critical of Aurora over accusations levelled against it in recent weeks, and suggested there was poor performance at lines companies across the South. Cont/
*Images: powernet.co.nz – OtagoNet JV and PowerNet range