Even Aurora Energy’s lower price hikes, slated to go into effect next month, could hurt some Otago families, says a researcher from the University of Otago.
The liner company, owned by Dunedin City Council, announced its price increases for 2021 yesterday.
The increases align the company with a draft trade commission decision on the company’s revenue, Aurora said.
The rise in Central Otago and Wanaka would remain higher than Dunedin, but lower than forecast, it said.
With Aurora starting price increases over the next five years to account for re-spending on its infrastructure, the portion of an electric bill the company was responsible for a given electric bill would decrease from 7.6 across the region from next month % increase to 8.5%. the company said.
Kimberley O’Sullivan, a senior research fellow at the University of Otago at Wellington, said it was clear that infrastructure investments needed to be made and that households needed reliable access to electricity.
However, an increase in energy prices would be difficult for some, said Dr. O’Sullivan.
Almost half of Dunedin households (47%) could struggle to afford energy for all of their needs, including warming their home to a healthy temperature, she said.
In tourism-dependent parts of Otago, where Covid-19 had damaged the local economy, some households could now find themselves in an energy emergency.
The most vulnerable people in Otago would be families with children living in privately rented apartments, she said.
Richard Fletcher, CEO of Aurora, said the company had listened to the public and adjusted break-even prices for this year.
It would re-evaluate its program for 2022, and a public consultation on these price changes would take place later this year.
If electricity traders passed all price increases on to consumers this year, the line component of annual electricity costs for Dunedin customers would increase by $ 59.28 (up 7.6% for 2020 from 2020) to $ 110.28 for customers in Central Otago and Wanaka (up 8.5%) and $ 74.40 for customers in Queenstown (up 7.6%) as of April 1, the company said.
However, the final price for each customer is set by their electricity trader.
Higher prices in Central Otago and Wanaka were due to the higher cost per customer of powering places with fewer people but lots of infrastructure.
In Dunedin, 56,000 customers were connected in a 2,375 km network, while the 2,600 km Central Otago network connected 22,000 customers.
In Queenstown, 14,500 customers were spread over 971 km, Aurora said.
It was planned to spend $ 523 million over five years, including a $ 315.5 million investment program on a power infrastructure modernization program that began in 2017 with the replacement of masts, lines, and the construction of new substations started.
About a quarter of all power poles have been reinforced or replaced, and the majority have been inspected, the company said.
Work on the poles will continue after years of underinvestment in the network, it said.
In 2020, Aurora spent $ 73.8 million on maintenance and improvements, and this year it should be spending roughly the same amount.
New power infrastructures planned included a new port of Dunedin crossing cable, line, mast and substation upgrades in Central Otago and Wanaka.
In Arrowtown, Aurora would renew the ring network, a transmission system for Arrowtown, Coronet Peak and Dalefield, the company said.
Aurora petitioned the Trade Commission for an increase in budget costs in Otago to fund a large network investment to upgrade the aging network.
The total income Aurora can bring in is determined by the commission.
The final decision of the Commission is expected on March 31st and new prices will be introduced the next day.