The Dunedin City Council (DCC) is considering selling its council-owned power company, Aurora Energy. The council plans to ask the public for their opinion on this proposal. The sale could generate millions of dollars every year by creating an investment fund, but it won’t be enough to prevent a predicted 18% increase in rates for 2024-25.
Aurora Energy provides electricity to over 200,000 homes and businesses in Dunedin, Central Otago, and Queenstown Lakes. The council members voted 13-1 in favor of discussing the sale with the public. Mayor Jules Radich believes that selling the company could help pay off Aurora’s estimated debt of $570 million and create a substantial investment fund.
Radich said that the fund would be safeguarded and adjusted for inflation to maintain its value. He also mentioned that the council was exploring other ways to generate income to make the city more financially sustainable. He expects a lot of interest in buying Aurora, which had total assets worth $805.3 million in 2023.
Radich assured that consumer rights would be protected by the Commerce Commission and Electricity Authority, regardless of who owns the company. He also promised to support Aurora’s staff during this potentially unsettling time.
Aurora Energy, owned by the DCC through Dunedin City Holdings Limited, has most of the company debt within the group. This debt is expected to continue growing as Aurora invests in upgrading its network across Otago. The company has faced challenges in the past and was fined nearly $5 million in 2020 for excessive power outages due to poor maintenance.
The proposal to sell Aurora Energy will be open for public feedback on March 28, and a hearing will be held in May to consider the responses.
