Aurora Energy Ltd is being challenged by some Central Otago local authority leaders to wholly fund the undergrounding of electricity lines in the district.
Aurora now offers to pay half the cost of undergrounding at the request of local authorities - providing those authorities pay the balance.
The offer of funding is capped and removed if local authorities fail to act within a specified time.
But at a Cromwell Community Board meeting this week, chairman Neil Gillespie questioned the reasoning behind Aurora's offer.
Mr Gillespie said it would be hard to match Aurora's contribution without impacting on rates, and therefore the community would be "penalised" - either by not being eligible to receive subsidised underground cabling, or by having to pay for half of it.
"Why doesn't Aurora just spend it in our region? Why should we front up with 50% to fund their infrastructure?" he said.
Mr Gillespie said although underground cabling was not a requirement of Aurora and was preferred by many residents, the community should not have to pay.
"It may be the case that the community wants underground cabling, but why don't [Aurora] just say that if we don't have the 50% then they'll just underground less using their contribution? Less is better than nothing, and they are making that commitment anyway," he said.
Aurora's acting chief executive Grady Cameron said when contacted an equally shared contribution was a "natural compromise" between doing nothing and funding the work completely.
"This is an appropriate way that Aurora can support and assist with community-led improvement projects. The cap is designed to encourage the community to focus some attention on undergrounding projects," he said.
Mr Grady said in the past five years - at the request of the Central Otago District Council - Aurora had jointly-funded $802,000 worth of undergrounding in Cromwell, Bannockburn, and Tarras.
"Electricity lines businesses like Aurora are not compelled to place existing overhead assets underground, and . . . there is no economic justification for undergrounding lines simply to provide visual improvement," he said.
Central Otago Mayor Malcolm Macpherson said it was in Aurora's interest to put cables underground.
"Lines underground are not subject to the same damage - they don't get blown over or hit by cars.
It benefits the average citizen in terms of aesthetics but it benefits lines companies financially," he said.
Dr Macpherson said Mr Gillespie's reasoning was "perfectly sensible".
"We struggle to justify large amounts of money on what's really just a tidying-up exercise."
He talked briefly to Dunedin Mayor Peter Chin about the issue and had written a formal letter to the Dunedin City Council and Aurora.
Dr Macpherson said it might be some time before anything tangible came from discussions, but negotiations would continue.
"This [underground cabling] could be seen as one of the ways Aurora and the DCC could put profits from Central Otago back into the district to mitigate power prices," he said.
The DCC owns Aurora through its investment company Dunedin City Holdings Ltd.
