This article is about Otago but is relevant to the whole of New Zealand. It is typical of how councils are operating.
The Otago electricity lines company, Aurora, is owned by the Dunedin City Council on behalf of the people of Dunedin – except it isn’t. It is owned by Dunedin City Holdings Ltd, in order to create a barrier between elected representatives and the unelected managers.
90,000 homes, farms, and businesses are held captive by this monopoly. Now they are facing massive hikes in line charges.
After years of criticisms for poor network reliability, creating safety hazards for workers, and lack of maintenance, the Commerce Commission took Aurora to court for failing to meet regulatory standards, resulting in a $5 million fine. That would be a significant amount of money if it was coming out of management’s pockets, but it is insignificant to those managers when it is coming out of ratepayers’ pockets.
Queenstown Mayor Jim Boult complained that the Dunedin City Council had taken high dividends instead of undertaking maintenance. That may be true, but it was the board of Dunedin City Holdings Ltd and Aurora Management who provided the dividends to make their performance look good. Councillors fell for it.
The lack of maintenance has led to a deterioration of assets that now have a calculated cost of $700 million to fix. Aurora has proposed a massive 23% increase in lines charges to consumers. No private company in a competitive industry could get away with that.
There have been several public meetings about this. Aurora’s customer manager Sian Sutton sums up the core problem. She is so out of touch with her customers that she complained in a tone-deaf letter to the Commerce Commission about rude and angry members of the public at these meetings. “Unacceptable behaviour” included “scoffing” when Aurora staff were speaking.
In my view, Aurora’s behaviour has been unacceptable for more than a decade. Sutton has highlighted that the core problem of councils and council-controlled organisations is the lack of accountability.