Vector faces millions of dollars in $50 compensation payments to householders blacked out following a fire in a substation it shares with Transpower.
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 in October last year following the cable fire at the Penrose substation.
"We think it's the right thing to do because we recognise and regret the impact on customers," said Vector chief executive Simon Mackenzie.
More than 75,000 customers were affected, most had power back within 36 hours but 2000 were without power for three days.
Who's to blame?
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.
It 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.
The Electricity Authority report and supporting material can be read here
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," Hansen said.
The inquiry report recognises the risk grew over many years as more cables were added to the trench.
While it could be difficult for parties to be alert to "creeping risk"it was important that parties are sensitised to it.
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 electritcity 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 where there may be a similar configuration of equipment as at Penrose.
It had around 169 substation sites around the country and a few of these have similar criticality to Penrose.
"Risk assessments have been undertaken at these sites and we are confident that the assets are in good operational order. We are systematically working through our other substations with our customers," she said.
Transpower may be ordered to help pay the cost of compensation which Mackenzie said "was the right thing to do".
Vector has completed key recommended actions including an inspection of all areas on its network where there are transition joints in the air (similar to those at Penrose), with mitigation works, including painting the joints with fire retardant - were largely completed.
• In the early hours of Sunday October 5, a fire was identified at the Penrose substation, resulting in a major outage in parts of Auckland.
• The fire was caused by the electrical failure of a transition cable joint
• The fire took around eight hours to extinguish and a further four hours to make safe and restore supply
• The majority of customers were reconnected that day, by 8am the next morning, 73% of customers were restored.
• Transpower and Vector appointed three independent industry experts to undertake an initial technical investigation into the cause of the fire.
• The Minister of Energy and Resources requested a ministerial inquiry into the incident to be undertaken by the Electricity Authority.
• Transpower and Vector commissioned a UK-based international technical expert in power cables to produce a report into the incident, which was provided to the Electricity Authority/Minister of Energy and Resource.
• Transpower and Vector prepared a joint investigation report into the incident which helped to inform the review undertaken by the Electricity Authority.
• The EA has accepted many of the findings and all of the recommendations in the Vector/Transpower report. The Authority has also relied on and drawn from the CCI (the international, independent cable expert) report in their inquiry.
• The independent, international cable expert has concluded that the cause of the fire was rare.