Electricity grid owner Transpower is being called on to face the music for a power cut estimated to be worth up to $4 million that affected much of the Waikato and Coromandel Peninsula last year.

Electricity regulator the Electricity Authority is to lay a formal complaint with the independent rulings panel against Transpower for allegedly causing a "severe impact" power outage to Hamilton, Cambridge, wider Waikato and Coromandel Peninsula on January 25.

The authority said it took nearly 1.5 hours to fully restore power. The value of the lost load of 185MWh is estimated between $3m and $4m.

The authority used a standard value of $20,000 per megawatt of lost load or "unserved energy" to calculate this range, said acting general manager of legal and compliance Chris Mathieson.


The decision to lay a formal complaint was in line with the authority's commitment to a reliable electricity industry - and a competitive and efficient one, said Mathieson.

"We want people to be able to rely on getting a continuous supply of electricity."

Transpower as grid owner had breached the code provisions and rules concerning grid asset protection systems on 29 occasions since 2004, the authority said.

Transpower owned up voluntarily to the alleged breach of the electricity industry participation code, which the authority said was "serious".

The maximum penalty under the Electricity Industry Act 2010 is $200,000.

The authority alleges the breach resulted from "systemic failures including the failure of multiple checks in a commissioning environment where fatigue, distraction and resourcing were contributing factors".

Transpower said it was constrained in its response by the matter being before the sector's ruling panel. It expected the hearing to be later this month.

"However, we will be following processes set down in the Code and will abide by any decision from the Rulings Panel. As with all power system events like these, we will review and learn lessons and apply these learnings to improve our operational processes," it said in a written statement.

The authority noted Transpower, as well as self-reporting the event, carried out a comprehensive review after it and took actions to reduce the likelihood of a repeat.

But it considered the aggravating features of the event outweighed these responses.

The authority said the outage occurred when Transpower was doing an upgrade project, part of which was work on part of a protection system for a Hamilton 110kV supply transformer.

The 29 previous cases related to the grid owner's role in management of the national electricity grid. Of these 12 were formally investigated. Several of the cases occurred during commissioning of new equipment.