SCANDAL : Aurora Energy Ltd set to burden Otago ratepayers and residents with massive rates increases

At Facebook:

****

“Overall, the planning period will be characterised by the delivery of the largest work programme in Aurora Energy’s history.” –Steve Thompson

Read: The Otago power network is THAT DEGRADED – caused by various rugby supporting and clip-ticket gentlemen, whose names we all know so well. Described by civil words (not cuss words) that start with F and C.

The “laundry” was well and truly harsh, leaving the network in threadbare tatters…. while private pockets were filled. That’s One Billion Dollars worth of power asset the Otago ratepayers have had to pay for TWICE. Talk about ‘power’ and corruption, Bryce Edwards (?) – Dunedin in the last 30 years was built on it, solidly at source.

The “gents” might like to explain where all the money went, and how the hell they think they can make us pay for their near limitless mismanagement and fully reckless endangerment (to workers, citizens and the regional economy) over three decades …..without shoving them in deep at the NZ Court system —for processing.

█ Today an Aurora/Delta executive had the audacity (after spinning out their LGOIMA response to the 20th working day, following my request made 26 April) to want to charge me for official information at the vindictive “maximum charge” (their words) of $190.00. Shove that, boys. Other council owned companies have provided the information free of charge and very promptly and courteously.

Tuck it back in your pants Aurora/Delta, or be sliced.

At Facebook:

● Aurora will spend $347 million on asset renewal, including a total of 14,000 poles…..

### ODT Online Wed, 24 May 2017
Aurora plans $720m upgrade of network
By Vaughan Elder
Aurora Energy has unveiled a $720 million plan to upgrade its ageing electricity network over the next decade. The plan is a more than $300 million increase on the 10-year plan the Dunedin City Council owned company released last year. […] In a press release this afternoon, Aurora Energy said the plan would have an extensive impact on the region’s economy through job creation and spill-over benefits to other businesses. […] Other major projects included a new substation at Carisbrook, which would replace the 60-year-old Neville St substation by 2019 and a new Wanaka substation on Riverbank Rd, Wanaka. […] Aurora Energy chairman Steve Thompson said an additional $81 million would be spent on growth and security of supply projects to support the region. […] The remaining expenditure was tagged to maintenance and operating expenditure ($192 million), and capital expenditure primarily related to new consumer connections and safety and reliability ($101 million).
Read more

****

The vertiginous mountain of HEALTH AND SAFETY DANGERS due to Aurora mismanagement and neglect of the power asset across Otago.

And the WorkSafe option could be “…..an infringement notice”, possibly not PROSECUTION.

Hmm, have the good old boys been dealing in the way they usually deal ??? Is WorkSafe a soft touch. To date it certainly hasn’t been Acute. Or at all worried about the danger to electrical workers or the general public. What a damnably prolonged and sordid farce this is.

### ODT Online Wed, 24 May 2017
No decision to prosecute Aurora
By Vaughan Elder
Worksafe is yet to decide whether it will prosecute Aurora Energy over the state of its power poles. WorkSafe has been looking into Aurora and its sister company Delta since October over accusations dangerous power poles across Dunedin, Central Otago and Queenstown Lakes were putting the public at risk. The government entity gave fresh details about its audit of the two companies in response to an Official Information Act request from the Otago Daily Times. WorkSafe high hazards and energy safety general manager Wayne Vernon said it had completed an “initial” audit of a sample of the network’s assets and provided a report to Aurora. […] “WorkSafe has not to date made a decision to prosecute or not to prosecute Aurora over health and safety issues associated with the state of its poles.” Mr Vernon emphasised prosecution was one of many options available to it, which also included issuing instructions to remove or minimise the potential for danger and issuing an infringement notice.
Read more

█ For more, enter the terms *delta*, *aurora*, *epic fraud*, *poles*, *healey* or *dchl* in the search box at right.

Posted by Elizabeth Kerr

This post is offered in the public interest.

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15 Comments

Filed under Aurora Energy, Business, Central Otago, Construction, DCC, DCHL, DCTL, Delta, Democracy, Design, Dunedin, DVL, DVML, Economics, Education, Electricity, Finance, Health & Safety, Highlanders, Infrastructure, LTP/AP, Media, Name, New Zealand, NZRU, OAG, Ombudsman, ORFU, People, Perversion, Pet projects, Politics, Project management, Property, Public interest, Queenstown Lakes, Resource management, SFO, Site, Sport, Stadiums, Technology, Tourism, Town planning, Travesty, Urban design

15 responses to “SCANDAL : Aurora Energy Ltd set to burden Otago ratepayers and residents with massive rates increases

  1. nick

    There is another scenario Richard, which I fear is most likely.

    The Commerce Commission will recognise that Aurora/Delta has been guilty of gross mismanagement of the network, by neglecting the necessary replacement and renewal of ageing, unsafe and obsolete assets.

    They will also recognise that the allowable revenue margins, relative to the value of Aurora’s assets as set out in their regulations, have been misappropriated. Instead of spending on maintenance, tens of millions have been spent on the stadium, on obscene salary packages rewarding inept management executives, and on multiple failed property ventures.

    It could be hoped that the ComCom will answer Aurora’s requests for substantial increases in its network charges with a flat ‘NO’.
    However, DCHL will still have to find a way to fund Aurora’s astronomical debt. Shake your pockets again ratepayers?

    We have until March 2020 until Aurora’s charges to consumers are reviewed and reset by the Commerce Commission under its ‘default price-quality path’ regulations. There is a fair degree of discretion here on the part of the Commission to consider the circumstances under which Aurora has found itself. Aurora will make their case to the Commission, and submissions are then called for on the Commission’s draft determination. It will be a long and protracted process, which in the past with some lines networks has ended up in Court.

    This helps to explain why Aurora is in no hurry to fix all the network problems immediately. Mr Crombie as an ‘associate member’ of the Commission will be considering the best plan.

    As for the massive Aurora debt which you have rightly and accurately predicted Richard, DCC will possibly elect to cut their very substantial losses and sell the network.

    On the basis of what has historically happened with this approach, there is big trouble looming for consumers. (Wellington City Council sold their network in 1996 to Trans Alta -Canadian owned – for $210 million. They onsold it 4 years later to United Networks for $560 million. United onsold to NZ’s Vector 4 years later for $800million. Vector onsold 6 years later to Chinese owned CKI Holdings which are domiciled in the Cayman Islands – that wonderful tax haven).
    Unfortunately, the Commerce Commission recognises that Lines Networks are justified in seeking a return on their investment, and this reflects immediately in the network charges that are allowable.

    DCC washes its hands, sells Aurora, retires some debt, and all the consumers in Aurora’s catchment are hostage to a new raft of considerably higher charges.

    Yet another strategic ratepayer owned infrastructure asset disappears to overseas ownership, along with a substantial revenue stream.

    What think you all now Hudson, Coburn, Polson, Lidell, Evans, McLauchlan, etc, etc, ???

    And Mr Farry? “$167m and not a penny more”
    We will need Ed Sheeran to perform to sell-out crowds at the stadium once a week for 3 months to replace Aurora’s annual subvention payments.

    Dunedin has learned the hard lesson that was argued so strenuously by so many well-informed Dunedin folk. Stadiums are nice to have, but unrealistically costly to own.

    And the fallout from Otago Rugby Football Union’s capture of Aurora’s revenue streams to support the stadium is just beginning.

    What a calamitous balls-up!

  2. Hype O'Thermia

    “Unfortunately, the Commerce Commission recognises that Lines Networks are justified in seeking a return on their investment, and this reflects immediately in the network charges that are allowable.”
    Can it be argued that they already had a return on their investment, sufficient to reward them AND maintain their asset but they chose to fritter it away?
    I know what sympathy would be extended to a beneficiary who turned up at WINZ for additional money for food, rent and electricity having spent their benefit on toffee apples. Food banks aren’t the easy touch they once were either.
    ComCom though… what “business” deserves, irrespective of unbusinesslike muddles – corporate welfare granted via unlimited access to Joe Public’s pocket?

    • Nick

      We in Central Otago are pretty touchy about Aurora’s behaviour. Our lines charges for an average household increased by over 1,000% since they took control nearly 20 years ago. In that same time, energy charges have only increased by around 45%.
      So we expect value for money, and at least a standard of reliability to be at least as good, if not better than we had under the good old days of our own local power board, with its democratically elected directors and competent management. Unfortunately, Aurora’s reliability stats are now among the worst of any network in NZ.
      We didn’t expect this nonsense, which the DCC is ultimately responsible for. Don’t expect Aurora’s application to the Commerce Commission to go unchallenged. If DCC has been happy to misappropriate our lines charges revenues away from essential network maintenance and divert those revenue streams into hapless property speculation, rates relief, the ORFU and stadium support, then so be it.
      We have already paid our over inflated dues once, and will make submissions against further increases in lines charges.

      The rules change, however, if the ComCom refuses to allow deferred maintenance costs to be reclassified as capex and recovered accordingly through increased lines charges. DCC will have no alternative but to sell Aurora.

      The market will determine the value of Aurora’s network, at which point a new default price path will alter the allowable return on investment by the new network owners, and charges will invariably increase across the total network catchment. Let’s hope for consumers that it doesn’t become a bidding war between 2 or more potential owners, although that would be the best outcome for the DCC.

      Max Bradford. Where are you now?

      • Nick

        And yes Hypo.
        Steve Thompson likes to believe “consumers can either pay for it then (2020) or now” referring to the multimillion dollar costs of the deferred maintenance renewal spendup.
        Steve hasn’t considered your very point, that we have already paid, and it has been frittered away. Look at Aurora`s annual reports over the last 2 decades to see what they have had to play with.

  3. Elizabeth

    At Twitter:

    ****

    At Facebook:

    ****

    [THE OUT]
    Mr Thompson said he was not in a position to say how much past failures were due to the situation, given he only joined the board midway through last year.

    [THE STAGGERING MISREPRESENTATION AND L***]
    For the consumer it was “just a timing issue”. “You either pay for it then or now.”

    Thu, 25 May 2017
    ODT: Aurora plan to cost consumers
    By Vaughan Elder
    Aurora Energy has unveiled a massive $720 million plan to upgrade its ageing infrastructure, but consumers will be taking a hit through larger power bills. The Dunedin City Council, which owns Aurora, is also set to be stung, as significantly lower dividends were expected until power price increases kicked in from 2020. […] Aurora Energy chairman Steve Thompson said the plan included replacing substations, lines and thousands of poles. […] But it would also mean more power interruptions for customers, to ensure worker safety, and larger power bills. This was because Aurora planned to apply to the Commerce Commission for a price increase to cover the cost of the increased spending. The price increase would start in 2020, but until then the extra spending on the network would not be matched by increased income. Cont/

    *Emphasis by whatifdunedin

    There is NO WAY the Dunedin City Council can’t massively increase its consolidated debt if “the plan” goes ahead. If the plan lives or dies, Mr Thompson may discover he needs to take a permanent ‘well-earned’ holiday where pyjamas are stamped with arrows.

  4. Elizabeth

    Never a better time to go off grid (if selfishness is the new fashion and your health is good).

  5. Elizabeth

    Offline, a colleague is discussing the need to raise a public petition for the ratepayers of Otago and power consumers, business and residential, across the Aurora Energy network geographical area. The terms of reference are under consideration, and the level of inquiry called for.

    Contact me offline at ejkerr @ihug.co.nz to discuss.

    • H.A.D. A. Gutsfull

      A petition sounds a good idea. Someone needs to be held accountable for this gouging. It appears that the tartan mafia have firm control over Dunedin ratepayers’ funds, and now have their sticky tentacles over other parts of the Otago region’s finances thru Aurora.
      A petition of say 200,000 plus to investigate the financial mismanagement, and the diversion of Aurora’s operational funds to the city’s vanity projects would make then sit up and take notice. Cockups and coverups has had its day. Let’s stop this double dipping dead.
      We should all get in behind a petition. We have a lot to gain. They have a lot to lose.

  6. Nick

    Yes, nothing will change under Thompson’s command, except a more expensive second tier of directors and executive managers to run the separated ‘sister’ companies of Aurora and Delta.

    ‘Sister’ companies??? I doubt there again will be a single woman appointed amongst this group of tools to continue the fiasco. Another stadium corporate box, and set of hospitality expense accounts for the parallel execs?

    WHAT SERIOUSLY NEEDS TO HAPPEN IS A COMPLETE REVAMP OF THE OWNERSHIP STRUCTURE.

    Excuse my impatience and shouting but the answer is so obvious. Look over the Waitaki to find how their network is run as a Trust. A democratically elected group of directors have the sole responsibility of running that network as efficiently as possible for the Trust’s owners – the consumers.
    No flash harry executive management teams, no expensive rebranding exercises every 5 years, no property speculation . . . and no scutiny by the Commerce Commission.

    How much will Aurora be spending alone to prepare its increased charges application to the Commission, and probably have to try and legally defend their rightful Commission rejection through the Courts, as has previously happened with North Island`s Vector Energy?

    Will the Tartan Mafia even consider such an obvious solution? A little too much traditional self interest appears to be in the way.

  7. Elizabeth

    The mayors and community boards of Otago need to take leadership in putting forward the community trust model. The smart boys of Aurora/Delta and DCHL need this slap in the face. Remembering that Dunedin is well compromised and while (maybe) business help ex Dunedin could be useful…. the answer is better nailed by Queenstown-Lakes and Central Otago – and if there is generosity there allowing Dunedin in on the hind leg.

  8. Elizabeth

    As provided previously for your information:

    Network Waitaki
    Network Waitaki Limited is an electricity distributor based in the Waitaki District and is part of Transpower’s Lower South Island (LSI) pricing region.

    Network Waitaki Limited is an electricity lines company distributing electricity from the national grid to consumers’ properties. Its area of supply extends from the Waitaki River to Shag Point, up the Waitaki Valley as far as Ohau
    and the Hakataramea Valley. It services 12,000 consumer connections across a network of 1,800km of power lines.

    Network Waitaki Limited is a 100% consumer trust-owned company. It is owned by the consumers for the consumers’ benefit and returns profit surplus to requirements back to its consumers by way of a discount.

    Our Mission Statement
    To be a locally owned and operated electricity distribution company that provides the benefits of local consumer trust ownership by:
    ● owning and operating a safe, reliable and efficient distribution system that meets the evolving needs of its consumers, in accordance with the Asset Management Plan.
    ● supporting the economic growth and wellbeing of the community it serves.

    Profile
    Since the industry reforms of 1999, Network Waitaki Limited has operated solely as an electricity lines business.
    It does not generate or sell electricity; this function is provided by electricity retailers.
    Network Waitaki’s core business is the provision, operation, and management of electricity infrastructure.
    It is an engineering-based asset management team.

    Construction, maintenance, and fault repair services are contracted out to field service providers.
    Network Waitaki Limited also has a contracting department which provides a range of field services. A metering service is also offered to electricity retailers.

    http://www.networkwaitaki.co.nz/

    [sample]

    WAITAKI POWER TRUST – NEW TRUST DEED JUNE 2007
    WaitakiPowerTrustNewTrustDeedJune20071-1-A9683-

    REVIEW OF OWNERSHIP – RECOMMENDATION TO WAITAKI POWER TRUST BY DIRECTORS, NETWORK WAITAKI LTD – 2011
    http://www.networkwaitaki.co.nz/ReviewOfOwnership-signed-2011.pdf

    WAITAKI POWER TRUST – A REPORT BY THE TRUSTEES DATED 19 MAY 2016 ON THE TIMING OF THE REVIEW OF OWNERSHIP OF SHARES IN NETWORK WAITAKI LIMITED
    http://www.networkwaitaki.co.nz/Waitaki_power_trust_2016.pdf
    [The next review of ownership of shares in Network Waitaki Limited will be held at a ten yearly interval in 2021]

    Subsidiaries
    Network Waitaki had one subsidiary company, Network Waitaki Contracting Limited (NWCL). However, NWCL amalgamated with Network Waitaki Limited on 31 March 2015.

    NWCL was a contracting business with an electrical contracting workforce based in Oamaru. It employed electrical fitters and technicians to provide services to commercial and industrial customers, and Network Waitaki consumers. Network Waitaki now offers all of the same services that NWCL did through its internal contracting department.

  9. Farmer

    I have been following this debacle and think that there seems to have been mismanagement for a long time. How could directors and highly paid CEO’s not see this day coming?
    I have a couple of observations / questions.
    1. Its all very well unveiling this $720m upgrade plan, but who is actually going to fund it? Who is Aurora’s bank? If they have a very weak balance sheet, who is going to lend them this kind of money? Or is it Govt guaranteed? Banks might think that the Govt would never let a lines company actually go broke so their money is safe? I presume they had the funding in place before they unveiled the plan.
    2. Now I might not be the greatest at maths, so help me out here and correct me if I am wrong. This $720m upgrade is all going to be debt funded. So 720 @ say 4.5% = $32.4m pa interest. Then if you were going to pay the capital back over 30 years that would be another $24m. So that is a total of $56.4m pa in repayments!!! Yes I know the interest bill will reduce as the capital is paid off, but that’s what it will cost for the first few years? That’s eye watering stuff. Has anyone explained that in the media? I have never seem anyone ask or explain how this is all going to be funded. I guess there is only one place they can get money from – electricity users!!
    Can someone who knows more than me about this tell me how much our line charges would have to increase per month to generate an extra $56.4m pa?

  10. Marious

    Electricity users to a point, prices can’t be increased to cover the whole dept.
    Rates payers
    Tax payers

    So in the end we all pay for a corrupt few to walk away. Or will they?

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