Alpine Energy will refund customers $16.9 million after it was found to have overcharged them.
The amount of the credit depends on the type and size of the customer, with householders receiving $261.69, or about an average month’s power bill, the South Canterbury-based lines company said in a statement.
The Commerce Commission said a warning had been issued and enforceable undertakings negotiated from the company after an accounting error resulted in the overcharging.
Commissioner Vhari McWha said the focus of the commission was on ensuring Alpine Energy returned the money that customers had been overcharged, with additional funds to make up for the harm the error caused the wider community.
“We’re mindful that, given electricity is an essential service, consumers may have suffered unnecessary hardship as a result of this error.
“That’s why in addition to paying customers back the amount they are owed, we have secured a commitment from Alpine to spend at least $1.5 million to support access to electricity in the local South Canterbury community.”
Unpicking the error’s effects had been a “lengthy but essential process” to ensure correct reimbursement to consumers, McWha said.
Alpine Energy owns and operates the electricity distribution network powering homes and businesses in the South Canterbury region including Timaru, Mackenzie, and Waimate districts.
It is partially owned by consumers connected to its network and pays a dividend to its shareholders which include the community trust. This results in a distribution to consumers through bill credits.
“While we do not think the breaches were intentional, they are nonetheless very serious and preventable.
“The undertakings therefore also require Alpine to make improvements to its processes so it can avoid making similar mistakes in the future.”
The lines company provided incorrect information in disclosure statements to the Commission relating to its depreciation calculations.
The Commission used this information to set allowable revenues and Alpine’s maximum allowable revenue was overstated, leading to customers being overcharged for the lines components of their electricity bills between 2015 and 2024.
As part of the enforceable undertakings, Alpine must carry out the following actions:
- Refund current customers the $16.9 million overcharged;
- Establish a programme to provide discretionary payments to former customers who would otherwise not receive a refund;
- Within two years, spend at least $1.5 million on initiatives to support access to electricity in the local community, like community resilience, affordability and energy efficiency;
- Prepare an improvement plan, setting out actions Alpine intends to take that are designed to mitigate the risk of a similar error occurring in the future.
$261.69 credit for majority of customers
Alpine Energy chairperson Melissa Clark-Reynolds said fixing the error had been a “top priority” for the Board and that she was pleased a settlement had been reached.
“The board acknowledges the concern and uncertainty this error has caused customers. We accept the decision from the commission today.”
She said nearly 31,000 homes and small businesses would receive an Alpine-funded one-off credit in their May or June electricity bills.
“The credit will be $261.69 for about 91% of customers, including most or all household customers and many small businesses. We acknowledge and thank electricity retailers for passing the Alpine credit to their customers.”
Alpine Energy said customers on three-phase connections will receive credits of $992.83, while credits for larger commercial and industrial electricity customers will depend on connection size and usage.
Former customers affected by the error can also apply for a credit.
