The figure was backed by economic consultancy Infometrics, whose chief executive Brad Olsen said the $60m came from analysis of public estimates of the economic cost of the 1998 Auckland blackout, adjusted for inflation, economic differences between Auckland and Northland between 1998 and 2024, and other factors.
Robinson told RNZ’s Morning Report there were several factors for businesses to consider in making an insurance claim, including the loss of a no-claims discount.
“When I sort of look at it for small businesses, if you’re talking anywhere between $1000 and say $5000 of direct loss, by the time you’ve submitted a claim and as I say you’ve used your excess and then you’re facing a probable policy cost increase in the next two to three years,” he said.
“It’s a zero-sum game. It’s actually not worth lodging the claim.
“The question is will the insurance companies bother to litigate against Transpower given the, I guess, complex nature of what it will take to achieve that outcome, because certainly Transpower seemed to double down and said well, no, because it was work done by a contractor, well actually it’s not our responsibility and it’s covered by the Consumer Guarantees Act, which of course it’s not, as far as business is concerned.
“I’m guessing that their contractor probably has public liability insurance, which generally speaking is about $10m. I mean, our challenge as a business is saying, well, okay Transpower, you’re actually now responsible for that debt over and above whatever that cover is that the contractor holds.”
If Transpower did not plan to negotiate a compensation plan, businesses would have to consider a class action lawsuit, Robinson said.
“We know there’s empirical evidence that, for some of those larger plants, it [the loss] is in the several hundreds of thousands of dollars.”
Some corporates kept their plants shut for longer, even after the power was restored, because the supply was still fragile, he said.
“So it wasn’t just a case of an afternoon of lost production. For some of them, it was three or four full days.
“For a lot of those large manufacturers, particularly the wood processing and so on, they’ve got large kilns and so on, which can sometimes take two days to restore to full production.”
Both Transpower and its maintenance contractor, Omexom, declined to speak on Morning Report.
In a media stand-up on Monday, Andrew said Transpower would follow the proper process in terms of compensation for those who lost power.
“Under the Consumer Guarantees Act, consumers can apply to their retailer for compensation. That all needs to be worked through and we will follow and work through with that,” she said.
“It is very early days in this investigation, we will work through the process.”
She would not be drawn on whether retailers would then come to Transpower or Omexom to claim that money back.
Northland households have the right to compensation for items damaged during the lengthy outage.
Consumer NZ spokeswoman Jessica Walker said that, under the Consumer Guarantees Act, supplied electricity must be safe and reliable.
Because the outage was caused by human error, it appeared that residential consumers had a strong case for compensation but the law did not protect businesses, she said.
