Aurora a ‘licence to print money’
A brand new proprietor of Aurora Power would have loads of room to extend energy costs in Dunedin, an trade whistleblower says.
The evaluation got here from firm critic and former Delta worker Richard Healey on the second day of a listening to about whether or not the Dunedin Metropolis Council ought to promote Aurora.
The corporate additionally operated in Central Otago and clients there had arguably the most costly line prices within the nation, Mr Healey stated.
A brand new proprietor might need the mentality the Central Otago “lemon has been squeezed pretty arduous”, however Dunedin clients may choose up extra of the associated fee burden, he instructed.
The Commerce Fee limits how a lot income may be retrieved from clients and Mr Healey stated income was decided by the fee.
Nonetheless, a brand new firm proprietor may very well be anticipated to take a special view from current decision-makers about how prices is likely to be levied and Dunedin is likely to be perceived as having “loads of room to extend costs”, he stated.
The majority of his presentation was about what he described as “true revenue” — or declared revenue plus deferred revenue.
Deferred revenue — income earned however not but in a position to be retrieved from clients — exceeded $50 million throughout three years till 2024, Mr Healey informed councillors.
“Aurora is a massively worthwhile firm,” he stated.
“It’s actually a gold-plated licence to print cash.”
Mr Healey informed councillors he thought there was a component of haste relating to a possible sale.
“I believe it’s a rush earlier than everyone wakes as much as simply how worthwhile Aurora actually is,” he stated.
The corporate had additionally dramatically elevated in worth.
Mr Healey was distinguished in information media from 2016, when he uncovered neglect of Aurora’s community.
He informed councillors yesterday 100 years of enterprise and energy had been “misplaced to incompetence and ignorance”.
There has since been a upkeep catch-up, and the corporate has not paid a dividend since 2017.
Mr Healey has usually expressed the view Aurora is ready to function in a regulatory and enterprise setting extremely beneficial to it and the corporate is price maintaining.
The listening to was dominated yesterday by submitters against a sale.
One was Allied Press chief govt Grant McKenzie, submitting as a ratepayer.
Mr McKenzie is a former metropolis council chief monetary officer and he was requested about Mr Healey’s evaluation of Aurora.
Mr McKenzie stated he would “take all the things Richard Healey says with a grain of salt — I’m undecided if I’m allowed to say that, however …”
Nonetheless, he didn’t contradict him and was on a broadly related wavelength on a number of factors.
“If I knew for each greenback I invested in my enterprise I used to be going to get a assured return, I might find it irresistible,” Mr McKenzie stated.
“Sadly, only a few companies get that chance.”
He referred to funding cycles and stated Aurora was going by way of a interval of heavy funding.
Cr Lee Vandervis instructed Aurora was “investment-hungry”, it wanted to take a position much more into Central Otago and the 2 strains to Wanaka have been insufficient. The council and its firms didn’t have the cash out there to optimise the worth of Aurora and run Central Otago strains in a method that was dependable or may give a return.
Mr McKenzie stated he had sought to reveal this might proceed to be funded by debt within the quick time period.
Cr Vandervis requested what it will imply if the council and its firms couldn’t increase the cash with out breaching a covenant with the Native Authorities Funding Company (LGFA).
Some extent of order for misrepresentation was referred to as about Cr Vandervis saying “we’re at our debt ceiling now”.
This was not upheld, and Dunedin Mayor Jules Radich stated the council was headed in the direction of its debt ceiling, however the LGFA matter was not returned to.
