Brian Rudman: Vector lines security in dark ages

Power company Vector is now blaming God for the power outages that left 180,000 Auckland properties in the cold and the dark after last week's storm. With the latest Census is likely to show a majority of Aucklanders doubting the very existence of the alleged offender, it's going to be a hard sell.

Closer to the mark surely, are the conclusions of the official inquiry into the 1998 power fiasco. In early 1998, not one, but all four of the major power cables servicing the CBD from the Penrose substation fizzled out, one by one, over several days, leaving downtown Auckland with a power crisis that lasted more than a month. The official inquest said the power company's operations and power line maintenance were below industry standards. The lesson to be learned, it said, was that utilities should systematically evaluate risk facing physical assets such as power lines.

Yet 20 years on and what do we have but more than 100 powers lines skittled by falling trees across the whole isthmus after a single storm.

As one of the 320,000 beneficial owners of a 75.1 per cent stake in Vector, I'm also grumpy with the trustees of Entrust (formerly Auckland Energy Consumer Trust) who we pay handsomely to look after our interests.

Trustees are required, as part of their duties as highlighted on the trust website, to "Take a proactive role in ensuring security of supply for our customers". As someone who last week was without power for two periods totalling nearly 24 hours - and I got off lightly - I say the trustees have failed horribly, as the controlling shareholder, to fulfil this function.

Instead, they seem content to don their Santa hats each September and, with much self-praise, share out the dividend - last year it totalled $110 million - at $350 a household. Imagine how much pro-active, supply-securing undergrounding that would have paid for.

It's not as though undergrounding is a new idea. It's been compulsory for new developments since the 1960s over much of the region - though I admit I'm not sure about the wilder parts of the north and west.

Illustration / Peter Bromhead

In 1984, for example, the old Auckland Electric Power Board (AEPB) launched a 40-year programme to underground existing power lines for environmental reasons. This included the old Auckland City, Manukau and Papakura boundaries. By 1988, $8m a year was being spent on the project. This came to a halt following the 1998 crisis. By then, 60 per cent of the wirescape had been buried.

In April 2000, and with the CBD calamity sorted, lines company Vector proposed a grand 10-year campaign to bury all remaining overground powerlines for just $400m. The catch was, it would have to be funded by a 20-25 per cent sell-off of the 100 per cent community-owned enterprise. Vector refused to fund it through borrowing, saying the economic returns would not be worth it.

This backdoor privatisation attempt failed and instead, the trust got a commitment from Vector to revive the old undergrounding programme, and commit to $10.5m a year.

It was headlined as taking another 40 years!

The above commitment did not include any undergrounding in the old Waitemata Electric Power Board areas of North Shore, Waitakere and Rodney, which didn't become part of the Vector network until 2002.

Vector now says 45 per cent of its powerlines are above ground, with 60 per cent of those in the north and west.

Given last week's outages, and predictions that with global warming such storms will become more frequent, it's surely time to speed up this snail-like pace.

For a start, controlling shareholder Entrust must increase the pressure on Vector. In the past, Vector has refused to up its game on the grounds undergrounding is a luxury that will affect the profits for minority shareholders.

It was a different story back in 1998, when the power went out for its powerful commercial clients in downtown Auckland. No expense was spared then to ensure security of supply was upgraded.

It's now time to treat their residential customers in the same way.

If it means a reduced dividend for shareholders, then so be it.