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Compensation from Transpower sought for outage

Media statement Tuesday, July 18, 2006

Compensation from Transpower sought for Auckland power outage

The Employers & Manufacturers Association (Northern) is exploring whether to take a group case on behalf of its members for compensation for losses caused by the June 12th power outage.

EMA is proposing Vector should initiate a "class action" against Transpower on behalf of its customers, and written to its members in Auckland advising them of the option.

"The independent report on the cause of the blackout on June 12th placed the blame squarely on negligent maintenance procedures by Transpower," said EMA's chief executive Alasdair Thompson.

"Hence we believe there is a reasonable case for Transpower to compensate the local lines company Vector and power retailers, so they can offer compensation to other parties detrimentally affected.

"We have asked our members to notify us and Vector in writing of their losses, and to ask Vector to consider taking action to get compensation from Transpower for those able to quantify their losses.

"Though we want Vector involved, they are not to blame, and neither are local power retailers.

"While the fault lies with Transpower, the problem is that businesses and other consumers are not direct customers of Transpower whereas Vector and the retailers are.

"This means that though we believe Transpower is liable if it were held to be negligent in its duty of care, insurance companies are not likely to settle on claims made directly by businesses if a third party is held liable.

"Vector's initial response has been that it may delegate its rights to its customers to seek compensation directly from Transpower.

"Individual businesses would need Vector's support one way or another.

"Transpower as an SOE, is responsible to its shareholding minister who is responsible to the electorate which brings a political dimension to the losses incurred due to Transpower's negligence."


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