The likely cause of a massive outage that left about 30,000 households and businesses without power has been traced to a broken insulator at Kaikohe substation.

Friday's blackout, which affected almost everyone from Towai to Cape Reinga, started about 10.30am. Power was restored in the main towns by 1.30pm but some outlying areas had to wait until 4pm. Only Taipa, which has a diesel generator, was spared.

The cause was a mystery at first with the only certainty that it occurred within 1km of Kaikohe substation where Transpower's national grid feeds into Top Energy's local network.

On Friday helicopters searched powerlines in the area without finding any sign of a fault; over the weekend efforts focussed on the substation with a "corona camera" used to look for arcing from lines and insulators.


No problems were found until further testing yesterday identified a possible broken insulator.

Top Energy chief executive Russell Shaw said the company was working with Transpower to "de-energise" the substation yesterday so repairs could begin.

He hoped the equipment could be fixed without disrupting power supplies but warned a second outage was possible if the insulator failed again.

Top Energy bought the Kaikohe and Kaitaia substations from Transpower in 2012 and in an initial statement yesterday appeared to blame the national grid operator for running them down.

"We acquired these assets from Transpower at the end of their life-span and in very poor condition, precisely because we felt they were a priority for the security of the electricity supply in our region ... Since acquiring the substations we've been flat-out conducting asset replacement and renovation works.

"Over the past 12 months alone we've spent $5 million upgrading this particular asset. It's frustrating that we hadn't yet replaced the piece of kit which likely caused Friday's outage," he said.

Later, however, Mr Shaw said he was not pointing the finger at Transpower but trying to establish context. Top Energy was aware of the age and condition of the substations, and the investment needed to bring them up to standard, when it bought them, he said.

Two years ago a transformer failed at Kaitaia substation but in that case power was not cut. The transformer was replaced in March.

The power cut coincided with the arrival in Bay of Islands of the first cruise ship of the 2015-16 season.

Business Paihia chairman Craig Johnson said the timing was "a shame" and would have cost cafes and shops money when some passengers returned to the ship early; Kaitaia businessman Ian Walker told Radio NZ power cuts were too common and made the Far North seem more like Zimbabwe than part of a first-world country.

Some Kaitaia and Kerikeri businesses closed during the outage but in Paihia cafes improvised with generators and gas barbecues.

Mr Shaw apologised for the disruption caused by Friday's outage. However, compensation was not available to businesses that had lost money. The company did its best to maintain the power supply but made no guarantees.