The Lines Company gets ComCom warning re outages

In the wake of multiple outages and the failure to meet minimum quality standards, the Commerce Commission has accepted enforceable undertakings from The Lines Company Limited (TLC), which connects 18,000 electricity customers throughout the King Country, Ruapehu and Central Plateau.

TLC fell short of minimum quality standards due to outages in the 2018, 2019 and 2020 assessment periods and has been issued a formal warning, says the commission.

The commission’s focus is on a review and recovery plan to help TLC improve its network performance and service to customers, says Commerce Commission infrastructure regulation general manager Andy Burgess.

“The agreed enforceable undertakings require TLC to have its network reviewed by an independent engineer, with that information forming the basis of a recovery plan that the company must deliver and report on.”

Burgess says many excessive outages can be attributed to poor processes and decision-making over several years, which means the network was inadequately safeguarded from known risks.

“We assessed TLC’s conduct against our enforcement criteria, the extent of detriment, seriousness of the conduct and the public interest.

“Our investigation concluded that there were many factors contributing to the outages, including significant adverse weather events, changes in live-line working practices, inadequate vegetation and poor asset management.

“This is very concerning, given the resulting disruption to TLC’s customers.

“In our view, TLC’s failure to introduce more robust asset management practices at an earlier stage played a significant role in the extent of its breaches.”

The commission’s decision to accept a recovery plan and issue a warning letter was made after an investigation that included site visits to inspect the network, a review of information provided by TLC and an independent engineering review from Strata Energy Consulting which identified several areas where TLC’s practices fell below good industry practice, it says.

The commission says it has accepted enforceable undertakings that are contingent on TLC engaging an independent engineering expert to report on TLC’s network, developing a plan to address the network and process issues identified in the report, reporting annually on its progress in carrying out the plan to improve the network, consulting with its key stakeholder groups when preparing its development plan, and providing information that is readily accessible to its consumers.

TLC acknowledges the settlement agreement with the Commerce Commission about historical failures in meeting some network quality standards, adding it has to undertake agreed action to improve its asset management practices.

It says the commission noted some of the circumstances contributing to the failures were “outside of TLC’s control” including some significant adverse weather events which caused damage to the network.

TLC chief executive Mike Fox says the company took full responsibility for the quality breaches, noting they had all been publicly disclosed. 

“We are not going to hide behind anything.

“It is a simple fact that we did not meet the standards we were required to and our focus now is on investing in such a way that we minimise the risk it will happen again.”

Since the breaches, a considerable investment has been made into TLC’s electricity network which services the King Country and central plateau.

TLC met all quality standards in 2021 and 2022 and remains on track for full compliance in the financial year, ending in March 2024, Fox says.

He notes there is now greater investment in the network than in the previous two decades.

“In the 2017-2023 period, we invested $98 million in the network to address a range of legacy issues,” says Fox.

“That’s nearly double what had spent in the previous six-year period. 

“Our investment will continue to increase over coming years as we seek to improve safety and reliability of supply.”

Visit the commission’s website for more information.