Commerce Commission takes on Vector over power outages

Energy company Vector plans to settle with the Commerce Commission after it failed to comply with regulations around network quality standards. 

Vector failed to meet the Commission's standards in 2015 and 2016, after it was revealed that an increased number of customers had experienced power outages over that period. 

It comes after Vector was slammed in April for its "pretty slack" response to a storm.

The Commission announced plans to file proceedings under the Commerce Act alleging Vector failed to comply with "good industry practice" in some aspects of its network management. 

But Vector said on Wednesday it is agreeing to a settlement with the Commerce Commission, and a penalty hearing will take place "in due course at which the details of the settlement will be heard". 

The Commission said Vector has co-operated with the Commission's investigation and confirmed it would not contest the proceedings. It also reported further breaches of its quality standards for 2017 and 2018 that are subject to a separate investigation.

The Commission found that Vector had breached its quality standards by 51 minutes in the 2015 regulatory year and 13 minutes in the 2016 regulatory year. 

In its defence, Vector said the breaches were due to increased storm frequency, and increases in Auckland's traffic congestion, which slowed travel time and prevented maintenance crews from reaching network faults quickly.  

"We understand the disruption these breaches have caused for some Aucklanders and we have been working hard on a range of measures to reduce the impact," said Vector's chief network officer Andre Botha.  

"However, we also believe the existing regime for quality control no longer reflects the reality of the changed operating environment, particularly in Auckland, and meeting these legacy quality standards will remain a significant challenge for ourselves and others in the industry."

He said Vector will continue to "work constructively" with the Commission to determine "new quality standards that will take effect on 1 April 2020 following the next regulatory reset process".

Vector is the second lines company to face court proceedings under section 87(1) of the Commerce Act for breaching its quality standards.