MEUG welcomes report by the Auditor- General

Press Release – For Immediate Release

Major Electricity Users Group (MEUG) welcomes report by the Auditor-
General

The Major Electricity Users Group (MEUG) welcomes the report by the Auditor-General yesterday on Managing the assets that distribute electricity.1

The Auditor-General noted room for improvement in managing for the longer term, saying:

“Electricity distribution businesses own assets with long useful lives, and we expect them to understand the financial effects of maintaining and replacing these assets for a substantial portion of the assets’ life. Instead, the three companies’ focus was largely on the short term. With a longer-term focus, the three companies can make better-informed decisions about how to manage their networks.

Improving knowledge of asset condition, performance of critical assets, and risk management strategies would complement the asset management practices that we observed. These are fundamental for electricity distribution businesses as their networks continue to expand and new technologies emerge.”

Concerns over the capacity, scale and investment in non-core investments by some, not by no means all, of the 29 local line companies have been reinforced by this report. In aggregate consumers pay around $2.5 billion per annum for local line charges so small improvements in productivity over the long term can make a real difference. MEUG acknowledges the Electricity Networks Association (ENA) is actively looking at this as an issue, as is the Electricity Authority and the Commerce Commission, and we look forward to seeing continued progress following the release of the Auditor-General’s report yesterday, concluded MEUG Chair John Harbord

1 Refer http://www.oag.govt.nz/2017/electricity-distribution?utm_source=subs&utm_medium=subs&utm_campaign=electricity

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