Vector agrees to full compo for surge-hit Kingslanders - but there's a catch

The households suffered tens of thousands of dollars in damages. Photo/Getty Images.

After an initially limited offer, Vector has agreed to fully compensate at least 10 Kingsland households who suffered tens of thousands of dollars worth of damage during a power surge on October 5 - but a consumer advocate says the lines company is still not doing enough to cover its legal obligations.

Vector had told the affected residents to go to their insurance companies. One couple, Matt and Louise McKenzie-Smith, told the Herald they would be left around $1000 out of pocket after insurance excess costs and loss of no-bonuses.

But late yesterday, Vector emailed residents, reversing its stance. "In this exceptional circumstance, Vector will reimburse any excess insurance costs incurred, or any associated insurance costs."

The cynical might see the only "exceptional circumstance" as the fact that the Herald highlighted the Kingslanders' case on Monday.

And while the residents welcomed Vector's change of heart, Allison Stafford-Bush - who has been co-ordinating an informal action group - was still worried about a negative impact on her insurance history.

Consumer head of research Jessica Wilson told the Herald the residents should not even have to make an insurance claim.

Under the Consumer Guarantees Act, a power retailer was obliged to provide an electricity supply of reasonable quality. Based on the information collected by Stafford-Bush, she thought there had been a clear breach of the act with the October 5 power surge, which fried kitchen appliances, automated garage doors, alarm systems, and electronically controlled hot water, ventilation and gating systems up and down Leslie Avenue.

Consumer's Jessica Wilson says Vector shouldn't have directed residents to grapple with their insurance companies. Photo / Supplied.

Power retailers, such as Mercury and Trustpower, should fully compensate residents, Wilson said.

If they didn't play ball, the affected households could appeal to Utilities Disputes, a no-cost, independent tribunal. Wilson criticised Vector for not informing residents of this right, as it was obliged to under the CGA, in her view. (Yesterday, for the first time in a string of at least five letters, the lines company added a reference about Utilities Disputes.)

The power retailers could then recoup their costs with a claim against Vector, Wilson said.

Louise McKenzie-Smith says she contacted her household's retailer, Mercury, yesterday, but was stone-walled and told to go to Vector [UPDATE: Since this story was first published, Mercury has asked the McKenzie-Smiths for more information and indicated it will try to work things out with Vector.]

Consumer's Wilson says if you complain to your power retailer and they try to throw you back to Vector, they are breaching the Fair Trading Act. The affected families should go Utilities Disputes at that point rather than pushing the point with your retailer, she says.

While appreciating Wilson's advice, and with it the potential to escape the episode with a clean insurance history, McKenzie-Smith says she's also tempted to make a claim anyway and take Vector's offer to pay her household's $1000 or so in insurance costs.

"It would be great not to go through insurance companies but realistically we need a result to move on and start replacing our things," she said.

Utilities Disputes commissioner Nanette Moreau told the Herald she often hears that people do not know her 17-year old agency exists.

However, she stresses it can and does investigate a range of issues - from billing to customer service, disconnections, supply and meter incidents. She sent the Herald details of four recent cases where a Utilities Disputes hearing has resulted in compensation for a household.

Vector said the October 5 Leslie Ave fault was technically not a surge but rather involved "abnormal voltage" where some customers received higher than usual voltage and others lower. It said that while it took care, it had no responsibility for the fault.

Contractors were onsite this morning, working on the transformer that caused the October 5 surge. They told one resident they were "installing a new earth bank."

The Leslie Ave incident caps a bad few days for Vector. The Commerce Commission filed legal action against the lines company on October 10 over outages. It also faces an accusation of greenwashing.