The lines company says it will pay the equivalent of a month's line charges - around $50 to residential customers and $200 to businesses who lost power following the cable fire at the Penrose substation.
One of those affected has scoffed at the compensation offer and vowed to return his $50 cheque in protest.
"I would think $50 would be an insult," said St Heliers resident Paul Lindsay, who was without power for several days. "My wife and I were obviously - like everyone else - kept in the dark for how long it took," the company director told the Herald last night.
"It was just a bloody nightmare for us. A nightmare for cooking and everything else and then they've just fobbed me off every time I've asked."
Most of those affected by the network failure had power back within 36 hours but 2000 were without electricity for three days.
The Government ordered the Electricity Authority to carry out an inquiry into the cut and it found the cost to consumers was between $47 million and $72 million.
Immediately after the mass outage, affected businesses and homeowners demanded compensation as insurance claims were lodged. Paymark figures showed the outages caused an estimated $4.3 million drop in spending on one day alone.
Fletcher Building was forced to shut down several factories, with the company taking a financial hit in the millions of dollars, it said.
The Electricity Authority inquiry has found that Auckland lines company Vector and national grid operator Transpower, which share the substation, should have identified and managed the risks associated with having dozens of cables located in a single trench.
Authority chief executive Carl Hansen said there were opportunities to avoid the fire.
"While both Transpower and Vector have good asset and risk management systems, these systems were not applied well enough at Penrose."
The inquiry concluded that while the cause of the fire was an electrical failure in an individual cable joint, the actual issue was the fact that 38 cables were located in a single trench.
"Since the security and integrity of the trench and cables were critical to maintaining a reliable electricity supply, this co-location risk should have been identified and managed," Mr Hansen said.
The inquiry report recognised the risk grew over many years as more cables were added to the trench.
In their submission to the inquiry, Transpower and Vector said surveys of network companies confirmed that cable fires from joint failures were "very rare" and information on them had not been publicly available.
A specific review of Penrose site risks carried out by Transpower in 2012 did not identify the cables in the trench as a concern.
Transpower and Vector chief executives Alison Andrew and Simon Mackenzie said it was impossible to guarantee 100 per cent reliability in electricity networks because of the cost of duplicating systems.
Alison Andrew said that since the incident, Transpower had undertaken a review of all of its critical sites.
Transpower may be ordered to help pay the cost of compensation, which Mr Mackenzie said "was the right thing to do".
Vector has completed recommended actions.
