Under its requested pricing, businesses in Dunedin could pay Aurora Energy $636 more in lines charges in the next three years, starting in April 2021. In Central Otago, businesses would pay $588 more over three years, and for Queenstown businesses the figure was $492.
Aurora sent its customised pricing plan (CPP) to the Commerce Commission on Friday setting prices for it to be able to spend $383million on its dilapidated assets.
Otago Chamber of Commerce chief executive Dougal McGowan said it was clear Aurora had paid attention to strong feedback from businesses.
"That’s probably as a result of that consultation ... so it’s nice they’re listening ... given the changes that have occurred quite recently, as well."
He said Covid-19’s economic impact meant any new costs to businesses were going to hurt.
"... any impact is going to be an issue. You’ve got high costs across the board and this is just adding to it.
"You’ve got the rates rises of local council ... you’ve got a lot of ‘a little, a lot’ increases, which are really going to have a strong impact on the viability of a lot of businesses."
One of the most common requests businesses made to the chamber was for help with cashflow and re-budgeting, Mr McGowan said.
"What people are saying is ‘we may not have the extra cash to keep those extra employees on’ and, ‘or we might have to close the door’."
In its CPP application Aurora has asked the Commerce Commission for more flexibility within its plan to delay work if it is not immediately needed.
It has already reduced its customer connection forecasts and deferred some projects, given the expected impact on tourism and hospitality from the pandemic — particularly on its Queenstown and Central Otago networks.
Aurora is assuming growth will be slowed by two years but will then return to pre-Covid levels in the year starting April 2022, the second year of the three-year customised price path it is seeking.
The company has already raised its spending on asset replacement, but is spending more than its regulated revenues allow for. It expects to spend about $790million by early 2029, and expects to have to seek a second, five-year CPP, starting in April 2024, to complete that work.
In its application, Aurora notes that by April next year it will have overspent the Commerce Commission’s allowances by about $207million over five years.
"The shareholder has foregone dividends and will continue to do so for an extended period, even if this CPP application is approved in full." — Additional reporting BusinessDesk
